Most owners go looking for funding at the worst possible moment. Payroll is Friday. The big customer pays in sixty days. You need money now, so you take the first offer that says yes.
That is how expensive money gets sold.
The better move is to understand the five paths before you need one of them. None of them is good or bad on its own. Each one is built for a different job.
Lobi Space is not a lender. We run a Chicago business address and workspace at 1655 S Blue Island Ave, and we are building Lobi Capital as a marketplace to connect owners with participating funding providers. This guide is here so you walk into that conversation knowing what you are looking at.
What every lender is actually asking
Strip away the product names and every funding decision comes down to four questions.
- Can you repay it? Revenue, and how steady it is. Most lenders want to see months of consistent deposits, not one good quarter.
- Have you repaid before? Personal credit, business credit, and any history with other financing.
- What happens if you do not? Collateral, a personal guarantee, or in some cases neither, which is why unsecured money costs more.
- How long have you been doing this? Time in business is the single filter that rules out the most applicants.
You cannot change those answers this week. You can know them before you apply, which stops you from wasting time on products you will not qualify for.
The five paths
Short term loans and lines of credit
A lump sum you repay on a fixed schedule, or a revolving line you draw on as needed. Fast, flexible, priced higher than bank money. The line is usually the better tool for uneven cash flow because you only pay for what you use.
Read the detail: short term loans and lines of credit.
SBA loans
Government guaranteed loans made through banks and approved lenders. The lowest cost money most small businesses can access, and the slowest to get. Weeks of paperwork, not days.
Read the detail: SBA loan requirements.
Funding against receivables
If your customers owe you money, you can sell or borrow against those invoices. Card based businesses get offered advances against future sales instead. Both solve a timing problem. One of them is far more expensive.
Read the detail: invoice factoring versus merchant cash advance.
Business credit cards
The first credit most owners get, and the most misused. Genuinely useful for small, repeatable expenses you clear every month. Genuinely painful when a balance rides.
Read the detail: business credit cards for new businesses.
Equipment financing
When the asset secures the loan, approval gets easier and the rate usually improves. Good for vehicles, machines, kitchens and gear. Not a general purpose fix.
Read the detail: equipment financing.
Match the money to the job
Ask what the money has to do, then work backwards.
- Cover a gap between invoicing and payment. A line of credit or receivables funding.
- Buy a machine that produces revenue. Equipment financing.
- Buy a building or fund a big expansion. SBA.
- Smooth small recurring expenses. A card you pay off.
- Survive an emergency. Be careful. Emergency money is priced for emergencies.
The mismatch that hurts owners most is long term needs funded with short term money. A ten month payback on a purchase that takes three years to earn out is a cash flow problem you created yourself.
Know your real cost
Rates get quoted in ways that are hard to compare. Ask every provider the same three questions and write the answers down.
1. What is the total dollar amount I will repay?
2. How often is a payment taken, and from where?
3. What happens if I repay early, and what happens if I miss one?
Total repayment and payment frequency tell you more than any advertised rate. A number that looks small next to a short term can be very large per year.
Before you apply, get your paperwork straight
Funding applications stall on boring things. Providers verify who you are and where you operate, and a mismatch between your filings, your bank record and your address slows everything down.
- One consistent business address on your formation documents, your bank account and your applications. Our virtual office in Chicago exists for exactly this reason.
- Business bank account separate from personal, with clean deposit history.
- Recent bank statements, filed tax returns and a current profit and loss.
- Your registered agent in good standing. If that is unsettled, start with registered agent service in Illinois.
Where Lobi Capital fits
We are building a place to start, not a bank. The idea is simple. Describe what you need, see the paths that may fit, and continue with a participating provider when the marketplace opens. Providers make every credit decision, set their own rates and terms, and disclose them to you directly.
If you want to know when it opens, join the Lobi Capital launch list. It is not an application and it does not affect your credit.
Frequently asked questions
What funding can a business with no revenue get?
Very little debt, honestly. Most lenders require months of deposits. New businesses usually start with a business credit card, a personal guarantee, or money from savings and people who know them.
How long does business funding take?
It depends entirely on the product. Short term online products can move in days. SBA loans commonly take weeks because of the documentation involved. Timing also depends on how fast you produce records.
Does applying for business funding hurt my credit?
A full application often involves a credit check, which can affect your score. Preparing a request or joining a launch list does not. Ask any provider whether their first step is a soft or hard inquiry.
Is Lobi Space a lender?
No. Lobi Space is a Chicago workspace and business address provider. Lobi Capital is a marketplace being built to connect owners with participating funding providers, and it does not make credit decisions or guarantee funding.
