Comparing the terms of a loan
Short or long, secured or unsecured, fixed or variable. These are not different products — they are choices within one, and each has a right answer for your situation.
A lot of lending content treats these as separate loan types. They are not. They are dimensions of the same term loan, and treating them as products is how people end up shopping for a label instead of a structure.
All three choices on one page
What each dimension costs you, and what decides it.
| Choice | Take the first when | Take the second when |
|---|---|---|
| Short vs. long term | The need resolves on a known date — an invoice, a season, a contract. | You are funding an asset or a purchase that earns over years. Longer lowers the payment and raises total interest. |
| Secured vs. unsecured | You have collateral and want size and price. Nearly all real borrowing is here. | You need speed or a small amount and will pay a premium. Note it rarely removes the personal guarantee. |
| Fixed vs. variable | The debt is long-dated, or your margins could not absorb a payment rise. | The term is short, coverage is comfortable, and you can survive the stress test. |
What none of these decide
Whether you can afford it, and whether the lender will say yes. Those turn on cash flow and on each lender’s own written credit policy — the SBA sets no minimum credit score at all. See what the SBA actually requires and the lender rankings, which show what each lender really approved rather than what it advertises.
Comparisons covered elsewhere on the site
- APR vs. factor rate — the one that costs people the most money.
- SBA loan vs. bank loan.
- Leasing vs. buying equipment.
- Grants vs. loans.
- Comparing loan offers — everything in a term sheet that is not the rate.