Loans by industry examples worth copying, and why

What to take away

Why the repayment schedule matters more than the rate

A loan is a schedule. The rate sets the cost, but the schedule decides whether you survive to pay it.

Two firms with identical revenue can have opposite outcomes. One gets paid before the loan debits; the other gets paid after. That timing gap, not the interest rate, is what kills businesses.

Construction: Granite Construction and the retainage trap

Granite Construction, a publicly traded heavy civil contractor based in Watsonville, California, reports retainage as a line item in its annual filings. Owners hold back 5% to 10% of each progress payment until the job is complete and the defects period ends.

A subcontractor billing $500,000 per month with 10% retainage has $50,000 per month earned but not collected. Over a twelve-month job, that is $600,000 sitting with the general contractor.

An accounts receivable line against those invoices typically advances 70% to 80% of the eligible balance, and retainage is often excluded from the borrowing base. The money you are waiting on is the money the line will not fund.

SBA 7(a) loans up to $5 million can fund that gap, but the term must outlast the retainage release. A five-year loan against a job with an eighteen-month defects period leaves three and a half years of payments after the money finally arrives.

A $600,000 working capital loan amortized over ten years runs about $7,600 to $8,600 a month at the rates SBA lenders typically charge.

The fix costs nothing: track retainage in a separate schedule with the release condition beside each line.

Agriculture: Farm Credit and the harvest cycle

Farm Credit System institutions, chartered under the Farm Credit Act, lend to farmers on annual operating lines that match the planting-to-harvest cycle. A corn farmer in Iowa plants in April, spends through August, and sells in October.

The Farm Credit Administration regulates the system and publishes its loan volume and structure each year. Each association sets its own rates, so the numbers move with its cost of funds.

A monthly term loan against that cycle debits in June, when the farmer has spent the operating line and has no revenue. Farm Credit's operating notes typically carry interest-only terms until harvest, then convert to principal payments.

Operating notes usually run twelve months. Equipment loans typically run three to seven years, and real estate loans up to thirty.

USDA Business and Industry Loan Guarantees, administered by Rural Development, back loans up to $25 million for rural businesses including food processors and cooperatives. The guaranteed share steps down as the loan size grows, and Rural Development publishes the current schedule.

The guarantee reduces lender risk, which can lower the rate.

Trucking: Crestmark and freight settlement timing

Crestmark, a division of MetaBank, factors freight invoices for small carriers. A trucking company hauls a load, invoices the broker, and waits 30 to 60 days for payment.

The carrier still pays fuel, insurance, and driver wages weekly. A term loan sized against annual revenue ignores that the revenue arrives in lumps.

Invoice factoring advances 80% to 90% of the invoice immediately and the remainder when the broker pays. The cost is a discount fee, typically 1% to 3% per month, which annualizes higher than a bank line. Compounded, that fee lands between roughly 13% and 43% a year.

Factoring terms are published by the factors themselves, and the ranges above are the ones they quote.

What makes a freight invoice financeable is the broker's payment record, not the carrier's revenue. One broker paying reliably on 30-day terms is worth more to a factor than ten brokers paying slowly. That logic is the same one behind invoice financing.

Restaurants: card settlement and the daily debit problem

A restaurant earns daily through card sales. A merchant cash advance collects a fixed percentage of those sales, which flexes with volume. A term loan debits a fixed amount, which does not.

A restaurant doing $80,000 per month in card sales with a 15% holdback remits $12,000 per month, but only in months with sales. A $12,000 fixed debit hits in February, when sales drop 30%, and the owner covers it from the payroll account.

Advance contracts typically set the holdback at 10% to 20% of daily card sales and quote a factor rate of 1.1 to 1.5, meaning $1.10 to $1.50 repaid per dollar advanced, over three to eighteen months.

The SBA 7(a) program caps at $5 million and allows terms up to ten years for working capital. That longer term lowers the monthly debit, which matters more than the rate for a business with seasonal swings.

SBA's published loan data lists restaurant borrowers by name, lender and amount, so this industry can be checked against real files.

Medical billing: insurance reimbursement and the predictable gap

A physical therapy clinic bills insurance, waits 30 to 45 days for reimbursement, and pays staff weekly. The gap is predictable and the payer is creditworthy.

A line of credit drawn against receivables and repaid as claims land matches that cycle. The clinic draws when claims go out and repays when checks arrive. The interest cost applies only to the days the money is outstanding.

Medical receivables lines typically advance 70% to 80% of eligible claims and price at a spread over the bank's prime rate. Medicare pays 95% of clean electronic claims within 30 days, a standard CMS publishes.

SBA 7(a) working capital loans and bank lines of credit both fit here. The difference is that a line prices daily and a term loan prices monthly, which matters when the gap is two weeks rather than two years.

A clinic with one dominant insurer has an easier file than one with twenty small payers, at the same annual revenue. The verification work a lender does on those payers is the same work described in lines of credit examples.

Equipment: matching the term to the asset's working life

A construction company buys a used excavator for $180,000. The machine earns for eight years in that use. A seven-year loan leaves one year of payments after the machine needs replacing.

Equipment lenders including Cat Financial, John Deere Financial and Crestmark's equipment division write terms against the asset's useful life, not the borrower's monthly cash flow. A five-year term on an eight-year asset builds equity; a seven-year term on the same asset delays it.

Advance rates typically reach the full invoice on new equipment and 80% to 90% of appraised value on used, with terms of three to seven years. Auction results published by Ritchie Bros. are the public check on what a used machine of that class actually sells for.

The decision is visible at the outset: the term is longer than the working life, and the reason it was chosen is that the longer term produced a smaller payment. Both facts are true, and only one appears on the offer sheet. The questions that settle it before signing are in equipment financing.

Industry-by-industry comparison table

How to size your own numbers

Terms and appetite belong to lenders and change without notice. The FDIC's Money Smart for Small Business explains how these products are structured, with nothing for sale. Free counselling that can read your figures without a stake in the outcome is available through the SBA's partner network, listed under local assistance.

The measurement work that comes before any application is set out in the loans by industry checklist. Whether your cycle resembles any of these six, and what that implies for which program fits, is worked through in loans by industry.

Common questions

Are the borrowers in these examples real companies?

The lenders and programs are real. These include SBA 7(a), SBA 504, USDA Business and Industry, and Farm Credit. Also included are Crestmark, Cat Financial and John Deere Financial. All publish their criteria. The borrowers are composites built from public case studies and aggregate SBA data, because individual loan files are not public.

Why are the dollar figures in the examples round numbers?

The $500,000 monthly billing, $180,000 excavator and $80,000 card sales are illustrative. They were chosen to make the arithmetic visible. They are not benchmarks. Substitute your own figures into the same structure and the timing question stays the same.

Which industry has the hardest time getting approved?

Construction subcontractors and restaurants with seasonal troughs face the most scrutiny, because retainage and seasonality both delay cash relative to the repayment schedule. A long payment history and a clean bank record matter more than revenue size in both cases.

My business looks like two of these at once. What then?

That is normal and usually means two needs rather than one product. Financing a seasonal buy and financing a slow payer are separate problems, and solving them with one instrument tends to solve neither well.