SBA vs Working Capital: Which one fits?

TL;DR — SBA = patient money for big purchases. Working capital = fast money for cash-flow needs. Pick by timeline, not interest rate alone.

The honest comparison

| | SBA 7(a) | Working Capital | |--|----------|----------------| | Time to fund | Typically 30-45 days | Typically 1-3 days | | Rate range | Prime + 2-3% | 18-50%+ APR | | Documentation | Heavy (tax returns, P&L, projections) | Light (bank statements only) | | Collateral | Often required | Usually unsecured | | Best for | Acquisitions, real estate, big equipment | Payroll gaps, inventory, fuel float |

When SBA wins

You're buying a building. You're acquiring a competitor. You need 10+ years to pay it back. You can wait the 30-45 days. You have clean books.

When working capital wins

Payroll is in 4 days. A vendor wants 30% deposit now. Your AC unit just died and you need a new one tomorrow. You don't have time to chase a bank.

The trap

Most owners I talk to default to working capital because it's easy. Then 6 months later they're paying 60% APR on something that should have been a 9% SBA. If you can wait, wait. If you can't, get the working capital — but refi to cheaper money the moment your numbers support it.

Want to talk it through?

Ping me. We'll figure out which one fits your situation in 10 minutes.