How do business loans work?
Business loans work like this: a lender gives your business a lump sum, and you repay it over a set term, principal plus interest, usually in fixed monthly or weekly payments. The rate you pay depends on your credit, revenue, time in business, and which lender you choose. That last part matters more than most owners realize: the same business can be quoted 7% by one lender and 40% by another. Understanding the mechanics is how you avoid overpaying, and matching to the right lender is exactly what Quordx Capital was built to do.
Part of our guide to Business Loans.
Last updated · Reviewed by Cody Dreis
50+ Lenders|Funding in as little as 24 hours
The Mechanics: Principal, Interest, Term, and Repayment
Every business loan has four moving parts. Principal is the amount you borrow: anywhere from $5K working capital loans to $5M+ SBA and equipment deals. Term is the repayment window, typically 1-5 years on a standard term loan, up to 10-25 years on SBA products. Repayment is usually a fixed monthly payment, though short-term lenders often debit weekly or daily.
Lenders price all of this on risk. Strong credit, 2+ years in business, and clean bank statements get bank pricing. Newer businesses or challenged credit get alternative-lender pricing: faster money, higher cost. Some products work differently: a line of credit charges interest only on what you draw, and a merchant cash advance isn't a loan at all but a purchase of future receivables priced with a factor rate.
The Main Types of Business Loans
Business term loans: $10K-$500K+ repaid over 1-5 years with fixed payments. Best for a single, defined investment.
Business lines of credit: $10K-$250K+ you can draw, repay, and redraw. Best for ongoing or unpredictable needs.
SBA loans: government-guaranteed loans up to $5M with rates currently around 10.5%-14% on 7(a). Best for the lowest cost if you can qualify and wait.
Equipment financing: the equipment secures the loan, which is why approval is easier. Best for vehicles, machinery, and tools.
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How Quordx Capital Works
Instead of guessing which lender fits you, you complete one 5-minute application and upload documents like bank statements and your latest tax return. Our AI scores your profile against 50+ vetted lenders and surfaces the 3-7 most likely to approve you. Decisions typically return within 24-48 hours; funds arrive in 3-7 business days, sometimes 1-3.
What to Expect
Expect real numbers, not teaser rates: every fee and term is disclosed before you sign anything. The biggest worry we hear is cost: rates vary widely by lender and credit, which is exactly why comparing matched offers beats taking the first yes. Quordx Capital is free to use, there's no obligation to accept any offer, and if no product genuinely fits, we'll tell you that too.
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Written by
Cody Dreis
Founder, Quordx Capital
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Quordx Capital is a business funding broker, not a lender. Lenders make every credit decision and set the rate, fees and terms, and not every business qualifies. Quordx may be paid by a lender when a deal funds. Full disclosures