Quick answer: Compare a business financing proposal by its purpose, total repayment cost, security requirements and flexibility. Review the written agreement and current eligibility requirements before choosing a payment schedule or relying on an estimate.
At-a-glance financing chart
| Decision factor | What to review | Why it matters |
|---|---|---|
| Business fit | Purpose, cash flow and timing | Clarifies what the financing must solve |
| Cost | Rate/factor, fees and total dollars paid | Prevents payment-only comparisons |
| Security | Collateral, guarantees and liens | Shows borrower risk |
| Flexibility | Prepayment, refinance and exit terms | Matters if plans change |
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Authoritative references
- Innovation, Science and Economic Development Canada — Canada Small Business Financing Program:
The Canada Small Business Financing Program makes it easier for small businesses to get loans from financial institutions by sharing the risk with lenders.
- U.S. Small Business Administration — 7(a) loans:
The 7(a) loan program is SBA’s primary business loan program for providing financial assistance to small businesses.
Program eligibility, lender criteria, tax treatment, and product terms can change. Verify current official guidance and the final financing documents before making a decision.
Source perspective
BDC’s equipment-financing guide emphasizes the complete financing structure when comparing offers.
“Don’t focus only on interest rates”
For the equipment decision discussed here, compare the amount financed, payment schedule, collateral and remaining obligations alongside the quoted rate.