The Intelligent Borrower Podcast
Changing our mindset and understanding of debt, both personal and for business purposes.
An intelligent borrower is someone who sees debt as a tool, not a lifeline.
They borrow with intention—knowing exactly why they’re taking on debt, how they’ll use it to create value, and when and how it will be repaid.
They understand that debt has a cost beyond the interest rate—it impacts cash flow, decision-making, and even emotional wellbeing. They don’t just qualify for financing; they qualify themselves by stress-testing their own numbers, planning for the worst-case, and making sure the upside is worth the risk.
An intelligent borrower reads the fine print and asks hard questions. They see lenders as partners, not rescuers, and they take responsibility for the commitments they make.
Above all, an intelligent borrower knows that access to debt isn’t the same as readiness for debt. They use it to grow, not to survive.
Let’s re-imagine debt in all areas of our life. Borrow Smarter. Build Stronger.
The Intelligent Borrower Podcast
Episode 6: Traditional vs. Non-Traditional Lending
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In this episode of The Intelligent Borrower, Todd Stichler breaks down the key differences between traditional bank financing and non-traditional lending options. From SBA loans to alternative funding sources, he walks through how small businesses actually access capital today—and what borrowers need to understand to choose the right path. It’s a practical, no-fluff look at how financing really works beyond the surface.
Most small business owners don't fail because they can't get money. They fail because they choose the wrong kind of money. And the truth is, most business owners don't actually understand their financing options. They just take what's offered, or worse, what's pushed on them. So today I want to simplify this. No hype, no jargon, just a clear breakdown of the real financing options available to small businesses so you can start thinking like an intelligent borrower. Welcome to the Intelligent Borrower Podcast. I'm your host, Todd Stickler. So outside of private investors, friends, family, there are really two worlds of financing: traditional bank financing and non-bank financing. That's it. Now here's the difference. Banks are typically lower cost, higher quality, and slower decisioning. Non-bank lenders are faster, more flexible, but more expensive. And here's the key idea I want you to keep in mind. There is no good or bad financing, only appropriate or inappropriate financing. So let's talk about traditional bank financing. These are going to be your national banks, your regional banks, your community or local banks. And these are usually the best forms of capital for small businesses if you qualify. And I tell everyone, run, don't walk to the bank. They have your best pricing, best solutions. And the solutions they have can be one of the following SBA loans, which are administered by the small business administration of the United States government. They work with the national, regional, and local banks to provide these services. And they're usually either a 7A or a 504 loan. And we'll get into all these details, but I'm just going to stay high-level today. So that means the bank takes less risk. So you get lower interest rate, longer repayment terms. And again, there are two main types: a 7A, which is typically working capital used for acquisitions or general business use, which could also include equipment financing, some other things, even maybe some real estate. But then the 504 of the SBA product is primarily either real estate or some type of large equipment. And here's the catch: it takes time and lots of paperwork and very strong financials to get an SBA loan. So, yes, great capital, but not always practical when you need speed. The banks also offer asset-based lending. Banks love assets. They need collateral to provide you the financing. So they don't lend based on your story. They lend based on what they can secure. So this will include lines of credit, which are flexible access to working capital. It could be based on receivables or inventory. They offer factoring lines. They will borrow against the invoices that you submit to your clients. And while you're waiting to get paid, the banks can use those invoices as collateral, which will help you smooth out cash flow. They'll provide term loans, which are fixed amount, predictable payments, predictable terms. They will also provide equipment financing. The equipment itself is collateral and it's typically structured to match the useful life of the equipment or five to seven year terms, somewhere around those years. And then real estate loans, obviously, which are a little bit longer term financing, lower rates, and again, secured by the property. Again, with asset-based loans like SBA, here's the takeaway. Banks lend against stability, not potential. They need collateral, they need security. With that comes time to make the decision, making sure that you have the financials in order and that are strong so that they can see what the business has, feel secured not only in the collateral, but in the fact that you're going to pay them back. And those decisioning usually takes time, but you are provided the best rates and the best options in the market. Now let's look at non-bank financing. The other side of the coin, right? Non-bank financing. This is where a lot of small businesses actually operate. The first one would be factoring. So unlike a traditional bank factoring line, there are factoring companies that are non-banks. Instead of borrowing, you are effectively selling them your invoices. You get cash now instead of waiting 30, 60, or 90 days. So it's faster on the cash flow, but it comes at a cost. You have equipment financing, a lot of non-bank equipment financiers out there. Again, similar to bank loans, traditionally 60 month terms, anywhere from 24 months to 84 months. You typically will have faster approvals, some more flexibility, but it's a slightly higher cost. Great option when banks say no or move too slow. You have real estate. A lot of people hear about hard money or private money. It's traditionally been associated with real estate loans. That is changing, but real estate loans, hard money loans, this is an asset-based lending, but speed's the priority. So you go to a non-bank lender. There can be used for bridge loans, construction loans, fix and flip projects, acquisition of properties before you can get them stabilized. Again, shorter term, usually, higher cost, faster access. And then you have unsecured financing, working capital loans. A lot of people hear about that. Maybe as a small business owner, you get 10 to 15 calls a day or more, or tons of text a day saying I can get you access to quick capital. This is really the world that of non-bank financing that is being pushed a lot lately. So this is the most misunderstood category where there's traditionally no collateral. It's based primarily on revenue or cash flow or your bank statements. It includes revenue-based financing, merchant cash advances, also called cash advances. And here's the truth: you have quicker access to it, but it comes at a cost. And this is where businesses get into trouble. Not because it's bad, but because it's misunderstood. So let's simplify everything. Traditional bank financing, lower cost, slower decisioning, harder to qualify, non-bank financing, faster, easier access, higher cost. And here's the thing you need to remember speed and convenience are not free. You're just choosing how you pay for them. So the intelligent borrower mindset, the goal is not the lowest rate or the fastest money. The goal is the right structure at the right time for the right reason for your business. Because debt isn't good or bad, but the wrong debt at the wrong time can quietly destroy your business. So in the future episodes, we're going to be talking and breaking down each one of these SBA loans, equipment financing, working capital loans. We're going to talk about the real cost of capital. We'll dig in a lot more on what a traditional bank financing versus non bank financing is because I really want you to understand your options so that you don't react and you start making decisions as an intelligent borrower. Check it.