Pinecroft Funding Group, a small-business funding broker in San Marcos, TX, compares six funding options on one page: working capital, term loans, lines of credit, inventory financing, equipment financing and merchant cash advances, which are not loans. Each is set out by repayment, security and typical use; lending partners decide and price every offer.
The six side by side
| Option | Money arrives | Comes back as | Usually secured by | Fits |
|---|---|---|---|---|
| Working capital | One lump sum | Fixed installments over months | Often a general lien or a personal guarantee | A shortfall that closes on a known date |
| Term loan | One lump sum | Amortized payments over years | Business assets, sometimes real estate | A single project priced up front |
| Line of credit | Draws up to a limit | Payments on the drawn balance | Receivables, a general lien or nothing specific | Costs that repeat in uneven sizes |
| Inventory financing | Lump sum or draws | Payments as the stock sells | The inventory itself | Goods bought ahead of sales |
| Equipment financing | Paid to the seller | Fixed payments over the asset's life | The equipment | A specific machine, vehicle or device |
| Merchant cash advance | One lump sum | Daily or weekly collections from sales until the agreed total is remitted | Future receipts (not a loan) | Usually weighed after the loan options |
These are common structures, not promises. Each partner designs its own products, and a real offer can differ on any line of this table.
Match the term to the life of the purchase
A useful rule: the funding should not outlast what it paid for by much. Wages and materials are gone within weeks, so spreading them over five years means paying interest long after the benefit has ended. A dining-room remodel or a dental operatory will earn for years, so forcing its cost into a few months strains every payroll in between. When the term and the useful life line up, the payment is covered by the thing the money bought.
Secured or unsecured, and what that really means
Secured funding names collateral, such as the equipment, the inventory, receivables or property, that the partner can claim if payments stop. Unsecured funding names no specific asset, but small-business partners nearly always ask the owner for a personal guarantee, and many file a UCC financing statement against business assets. In practice the difference is less about whether something is at risk and more about which thing it is. Ask every partner what it will file and what the guarantee covers.
A business loan or the company card?
A card is handy for small, frequent purchases and costs nothing if the balance is cleared each month. Carrying a balance is usually dearer than a loan or a line, and card limits rarely stretch to a machine or a build-out. Plenty of owners keep both: the card for everyday spending, a line or a loan for anything they will pay off over many months.
Uses partners commonly accept
- Payroll, rent and supplier bills while invoices are outstanding
- Stock bought ahead of a busy stretch
- Machines, vehicles, technology and clinical equipment
- A finish-out, renovation or second location
- Paying off costlier business debt
Business funding is for business purposes, and many contracts limit owner draws or personal use. The use-of-proceeds clause in each offer says what is allowed.
Texas business loans and where SBA lending fits
Owners searching for business loans in Texas will find banks, credit unions, online lenders, SBA-participating lenders and advance funders. Pinecroft Funding Group works with lending partners across the six options above. We do not arrange SBA-backed loans, so if an SBA 7(a) or 504 loan is what you want, start with an SBA-participating bank and the free counselors listed in our Hays County resources directory. Each SBA program's requirements are set by the SBA and the participating lender, not by a broker.
Picking one in practice
If you know the purpose but not the product, begin with the purpose. If an offer is already on the table, compare its total cost and payment calendar with at least one other row above. Hays County business counts show which sectors dominate locally, and every option page explains what partners usually ask to see.
By Pinecroft Funding Group ยท Updated