The Four Products, Explained Simply
Most articles compare two funding options and call it a day. But business owners don't pick between just two choices. You're usually weighing three or four at the same time - and the differences between them are bigger than most people realize.
Here's a quick overview of the four most common funding products we help business owners evaluate:
Credit Stacking
Your broker strategically applies for 3–6 business credit cards on your behalf, matching each application to a lender based on your credit profile and which bureau they pull from. Their credit limits combine into one pool of capital - typically $10K–$250K - with 0% APR for 12–18 months. These products evaluate your creditworthiness based on your personal credit profile rather than business revenue, which is why they're accessible to startups. No collateral, and funded in 2–3 weeks. You need a 700+ credit score, but approval depends on much more than just the number - utilization, payment history, inquiries, and overall credit health all factor in. Read our full credit stacking guide for the deep dive.
Term Loan
A lump sum you receive upfront and pay back in fixed monthly installments over 1–10 years. Rates range from 15–30% depending on the lender and your qualifications (SBA loans can be lower, in the 10–14% range). You need at least 6 months in business with documented revenue. Term loans are the most traditional form of business financing.
Merchant Cash Advance (MCA)
You sell a portion of your future sales for a lump sum today. Instead of an interest rate, MCAs use factor rates (typically 1.2–1.5), which means you repay a fixed total regardless of how long it takes. Payments come out daily or weekly as a percentage of your sales. Speed is the advantage - funded in 1–3 days.
Business Line of Credit
A revolving credit line you draw from as needed. Think of it like a credit card for your business bank account. You only pay interest on what you use. Rates typically range from 15–35%, and limits run from $10K–$500K. Great for managing cash flow fluctuations. Learn more about lines of credit.
Important: These aren't the only options. SBA loans, equipment financing, and real estate loans all serve specific needs. This comparison focuses on the four products most commonly compared to credit stacking.
The Full Comparison Table
Here's how all four products stack up across 10 key criteria. This is the table nobody else puts together - because most funding companies only offer one or two of these products.
| Criteria | Credit Stacking | Term Loan | MCA | Line of Credit |
|---|---|---|---|---|
| Typical Amount | $10K–$250K | $25K–$5M | $5K–$500K | $10K–$500K |
| Interest / Cost | 0% for 12–18 mo + 9–11% fee | 15–30% APR | 1.2–1.5 factor rate (20–50%+ effective APR) | 15–35% APR |
| Speed to Fund | 2–3 weeks | 1–6 weeks | 1–3 days | 3–10 days |
| Min Credit Score | 700+ | 580+ (varies) | 500+ | 600+ |
| Revenue Required | None | $10K+/mo (varies) | $10K+/mo | $8K+/mo (varies) |
| Time in Business | Any (startups OK) | 6 months–2+ years | 6+ months | 6+ months |
| Collateral | None | Sometimes required | None (future sales pledged) | Usually none |
| Repayment | Minimum monthly payments | Fixed monthly installments | Daily or weekly auto-debit | Pay interest on what you draw |
| Personal Guarantee | Yes (credit cards) | Usually yes | Sometimes | Usually yes |
| Best For | Startups with strong credit | Established businesses, large projects | Fast cash, lower credit scores | Cash flow management, flexibility |
What $100K Actually Costs You
The comparison table shows rates and ranges. But what does $100,000 in funding actually cost with each product? Let's do the math.
| Product | Total Repayment | Total Cost | Effective Cost % |
|---|---|---|---|
| Credit Stacking (paid off in 12 months) | $109,000–$111,000 | $9,000–$11,000 | 9–11% |
| Term Loan (20% APR, 3-year term) | ~$133,800 | ~$33,800 | ~34% |
| MCA (1.3 factor rate, 12-month payback) | $130,000 | $30,000 | 30% |
| Line of Credit (20% APR, $100K drawn for 12 months) | ~$120,000 | ~$20,000 | ~20% |
The catch with credit stacking: The 9–11% cost only holds if you pay off the balance during the 0% intro period. If you carry $100K past the intro window at 22% APR, you're looking at roughly $1,833/month in interest alone. That changes the math entirely.
Pro Tip: The cheapest product isn't always the best product. A $100K MCA at 30% cost might make more sense than a $100K SBA loan at 11% if you need the money this week and the SBA loan takes 3 months. The cost of waiting - lost revenue, missed opportunity - matters too.
Real-World Scenarios
Numbers on a spreadsheet only go so far. Here's how these products play out for real business owners in real situations:
Scenario 1: The Startup With Strong Credit
Situation: You just registered your LLC. You have a 740 credit score, no business revenue yet, and need $60K to buy inventory and run your first marketing campaign.
Best fit: Credit stacking. You don't have the revenue history for a term loan. You don't have 6 months of bank statements for an MCA. But your personal credit opens the door to $60K+ in 0% APR capital through credit stacking. Total cost: roughly $5,400–$6,600 in stacking fees.
Why not the others? Term loans and lines of credit require revenue documentation. MCAs need bank statements showing consistent deposits. As a startup, you don't have either.
Scenario 2: The Established Business Expanding
Situation: You've been running a landscaping company for 4 years. Revenue is $50K/month, credit score is 680, and you need $200K for a second location.
Best fit: Term loan (or SBA loan). Your 4 years of history and $50K/month revenue make you a strong candidate. A term loan at 15–22% APR gives you a fixed payment you can plan around. If you're patient and organized, an SBA loan gets you significantly better rates (10–14% range).
Why not credit stacking? Your 680 score is below the 700 threshold. And $200K would push the limits of what credit stacking can deliver. You have the revenue and history to qualify for better products.
Scenario 3: The Seasonal Business in a Cash Crunch
Situation: You run a snow removal company. Revenue drops 80% in summer. You need $40K now to cover payroll and equipment repairs before the next season starts.
Best fit: MCA or line of credit. You need the money fast. A line of credit gives you flexible access, and you only pay interest on what you draw. If your credit is lower or you need it this week, an MCA gets cash in your account in 1–3 days. Yes, it's more expensive. But the alternative - missing payroll or losing equipment - costs more.
Why not credit stacking? The 2–3 week timeline is too slow for an urgent payroll situation. And if your score is below 700 from seasonal cash flow stress, you won't qualify.
Scenario 4: The E-Commerce Entrepreneur
Situation: You launched an online store 8 months ago. Revenue is $15K/month and growing. Credit score is 720. You need $75K for inventory before your peak season.
Best fit: Credit stacking + small line of credit. Your 720 score puts you in the credit stacking sweet spot. You could get $50K–$100K at 0% APR for inventory purchases. A small line of credit supplements for ongoing cash flow needs. This combination gives you the lowest total cost.
Why not just a term loan? At 8 months in business and $15K/month revenue, you'll get approved for a term loan - but at higher rates (20%+). Credit stacking gives you better terms because it's based on your personal credit, not your young business history.
Key Takeaway
There's no single "best" product. The right choice depends on three things: your credit score, your business history, and how fast you need the money. The scenarios above show why the same business owner might use different products at different stages.
Which One Is Right for You?
Ask yourself these three questions. Your answers point to the right product:
Question 1: What's your personal credit score?
- 750+: Credit stacking (highest limits), SBA loans, term loans, lines of credit - you qualify for almost everything.
- 700–749: Credit stacking (moderate limits), term loans, lines of credit. You have strong options.
- 600–699: Term loans, lines of credit, MCAs. Credit stacking is off the table, but you still have good choices.
- Below 600: MCAs and some alternative term loans. Options narrow, but they exist. Focus on rebuilding credit for better future terms.
Question 2: How long have you been in business?
- Pre-revenue / just started: Credit stacking is likely your only option (if credit qualifies).
- 6 months–2 years: MCAs, some term loans, some lines of credit. Revenue history starts opening doors.
- 2+ years with strong revenue: Full access to term loans, SBA loans, and lines of credit at the best rates available.
Question 3: How fast do you need the money?
- This week: MCA (1–3 days) or line of credit (3–10 days).
- This month: Credit stacking (2–3 weeks) or term loan (1–6 weeks).
- No rush - want the best deal: SBA loan (60–90 days) for the lowest rates and largest amounts.
Pro Tip: Don't commit to one product before talking to someone who knows all of them. Most funding companies only sell what they carry. A broker with access to all four product types - and 100+ lenders - can map your specific situation to the best fit. That's what we do.
Using Multiple Products Together
Here's something most articles won't tell you: you don't always have to pick just one. Smart business owners often use multiple products at different stages - or even at the same time.
Common Combinations
- Credit stacking + line of credit: Use the credit stack for a large upfront purchase (inventory, equipment). Keep the line of credit for ongoing cash flow needs. The credit stack gives you the lowest cost on the big spend. The LOC gives you flexibility month-to-month.
- Credit stacking now, term loan later: Use credit stacking to fund your first 6–12 months. Build revenue history. Then refinance into a term loan or SBA loan with better long-term rates once your business can qualify.
- Term loan + line of credit: Use the term loan for a specific project (expansion, equipment). Keep the LOC for working capital. Fixed payments on the project, flexible access for operations.
The bridge strategy: We help many startup owners use credit stacking as a bridge to traditional financing. Start with 0% APR capital, generate revenue, build business credit, then graduate to term loans or SBA loans. It's a deliberate path - not a one-time transaction. See our full guide on credit stacking funding amounts.
How Huge Capital Helps You Choose
Most funding companies have a hammer, so everything looks like a nail. MCA companies sell MCAs. Credit stacking companies sell credit stacks. They'll make their product fit your situation - even when it doesn't.
We carry all four products. Plus SBA loans, equipment financing, and real estate products. When you talk to us, we're not trying to sell you one thing. We're trying to figure out what actually fits.
Here's what that looks like:
- We review your credit profile, revenue, time in business, and what you need the money for.
- We tell you which products you qualify for - and which ones you don't.
- We show you the real cost of each option side by side.
- You pick. No pressure. No games.
If credit stacking is the best fit, great. If a term loan makes more sense, we'll tell you. If you need an MCA this week and a credit stack next month, we'll plan both.
What Makes This Different
We don't just fund one transaction. We map out your funding strategy for the next 12–24 months. Where you are today, what products fit now, and what you'll graduate to as your business grows. That's the value of working with a broker who has every product type and 100+ lending partners.
Frequently Asked Questions
What is the difference between credit stacking and a business loan?
Credit stacking uses multiple business credit cards to create a pool of 0% APR capital ($10K–$250K), requiring strong personal credit (700+) but no revenue or time in business. Business loans provide a lump sum with fixed repayment terms, typically requiring 6+ months in business and documented revenue. Credit stacking is faster (2–3 weeks) and has no interest during the intro period, while business loans offer larger amounts and longer repayment terms.
Is credit stacking cheaper than a business loan?
It depends on how quickly you pay it back. Credit stacking costs 9–11% in company fees with 0% APR for 12–18 months. If you pay off the balance during the intro period, your total cost is just that 9–11% fee. A term loan at 20% APR over 3 years costs roughly 34% of the principal in total interest. An MCA with a 1.3 factor rate costs 30%. Credit stacking is cheapest if you repay within the 0% window, but it becomes the most expensive option if you carry balances at the standard 18–28% APR.
Can I get credit stacking with bad credit?
No. Credit stacking requires a 700+ personal credit score. Below that, approval rates drop and credit limits aren't worth the effort. If your score is under 700, look at MCAs (500+), lines of credit (600+), or term loans (580+) depending on your revenue and time in business.
Which is better for a startup: credit stacking or an SBA loan?
For most startups, credit stacking is more practical. SBA loans require extensive documentation, 2+ years of financials, and take 60–90 days to fund. Most startups don't have that track record. Credit stacking only requires strong personal credit (700+), takes 2–3 weeks, and doesn't need business revenue. The trade-off is that SBA loans offer larger amounts (up to $5M) at lower rates if you can qualify.
What happens if I can't pay back my credit stack on time?
When the 0% intro period ends (12–18 months), any remaining balance starts accruing interest at 18–28% APR. On a $50K balance, that's $750–$1,167 per month in interest alone. Having a payback plan before you start is critical. If you can't repay within the intro window, consider refinancing into a term loan or line of credit with lower rates.
Can I use credit stacking and a business loan together?
Yes. Many business owners use credit stacking for immediate startup costs while building revenue history for a term loan or SBA loan. For example, use a $75K credit stack to launch, generate 6–12 months of revenue, then refinance into a business loan with better long-term rates. We help clients plan this bridge strategy regularly.
How do I know which funding option is right for my business?
Start with three questions: What's your credit score? How long have you been in business? How fast do you need the money? If you have 700+ credit and limited business history, credit stacking fits. If you have 2+ years with strong revenue, a term loan or SBA loan gets better rates. If you need money in days, an MCA or line of credit is fastest. A funding advisor can map your specific situation to the best product.
Is a merchant cash advance better than credit stacking?
MCAs are faster (1–3 days vs 2–3 weeks) and have lower credit requirements (500+ vs 700+). But they're significantly more expensive - a 1.3 factor rate costs 30% of the advance. Credit stacking at 9–11% with 0% APR is much cheaper if you qualify and can repay within the intro period. MCAs make sense when speed is critical or credit is a barrier. Credit stacking makes sense when cost matters and you have strong credit.
Not Sure Which Funding Option Fits?
We'll review your situation and show you every product you qualify for - side by side, with real costs. No pressure.
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