Although factor rates and interest rates appear similar, there are some important differences which potential borrowers need to be aware of. Fixed fees (the fee determined by a factor rate) are only calculated once, before the loan is issued. The fee will stay the same, regardless of how long repayment takes. On the other hand, interest rates are accrued over time—the longer your loan is outstanding, the more fees will build up. Read on for more about the difference between factor rates and interest rates.

A lease line of credit — also known as an equipment line of credit — addresses that issue. Rather than financing a specific piece of equipment, the lender will grant you a line of credit for a limited period of time (typically one year). Similar to a personal or business line of credit, you’ll be given a credit cap.

A tax lease is a rental agreement in which the entity financing the lease (lessor) retains ownership of the asset in question for the duration of the lease with regard to tax and bookkeeping purposes. Tax leases last less than a year.

Shopify Capital offers short-term business funding in the form of merchant cash advances and short-term loans. It has relaxed borrower qualifications and competitive terms and fees. Shopify Capital is available to Shopify users only. Despite the potentially high fees, Shopify Capital is certainly worth considering if you are given an offer.

If you’ve been searching the internet for information about equipment leasing, you’ve probably run into a wall of industry jargon. Between captive lessors, capital leases, equipment financing agreements, and references to Section 179, the terminology can get pretty opaque. This is especially true when it comes to TRAC leases. If you’ve ever wondered what the TRAC lease is, how it works, or even just what the acronym stands for, you’ve come to the right place.

Whether you’re paving a road or writing software, sooner or later you’re going to need to buy, upgrade, or replace your business-related equipment. Unless you’re lucky enough to have a lot of cash on hand, the costs of doing so out of pocket may prove prohibitive. If you don’t have the luxury of waiting, you’ll need to seek financing. When that happens, you should consider an equipment loan.

National Funding is a lender that provides funding to small businesses that cannot yet get a bank loan. It provides reasonable rates for an alternative lender as long as you fall on the lower range of its factor rates and origination fees.

Adyen is an international merchant account provider known for its big-name users, including Microsoft, Pinterest, eBay, Uber, and Spotify. Impressed yet? It’s hard not to get a little starstruck, but we didn’t want to let that sway our non-biased approach. You’ll find that as a small business owner, you may have some things to be cautious about, and we’ll tell you why in this review.

Headway Capital offers business lines of credit to qualified merchants. Headway Capital might be convenient for merchants who need a small credit line to capitalize on business opportunities or other working capital needs. Be cautious about the high APR and additional fees.

Equipment financing is the use of a loan or lease to purchase or borrow hard assets for your business. This type of financing might be used to purchase or borrow any physical asset, such as a restaurant oven or a company car. How does it work? What types of equipment financing are available? Get the answers to your questions in our equipment financing guide.