When you’re looking for financing for your small business, the number of options among which to choose can be mind-boggling. A traditional bank loan is probably the first thing you think of, but there are also a variety of online lenders out there, as well as invoice funding solutions.

Which is right for you? Here’s a closer look at each of these three options.

Bank Loans

Once upon a time, bank loans were your only option for getting a small business loan. However, if you’re in the startup stages, bank loans probably won’t work for you. Generally, banks are reluctant to lend money to new businesses, especially if you’re in an industry with a high failure rate, such as the restaurant business.

Are you looking for a small amount of capital—maybe $10,000 or $50,000 to get you through a slow season? Once again, banks typically aren’t the best place to start. Because it is expensive for banks to go through the loan underwriting process, most will only make loans for larger amounts of money.

Do you need a loan quickly? Sometimes, cash flow problems happen without much warning. Other times, you’re presented with a business opportunity that’s too good to pass up, but requires additional capital. Unfortunately, getting a bank loan can take a long time. Most banks will want to see a business plan in addition to financial documentation such as tax returns and financial statements. Getting all of this together takes a while—and once you’ve submitted your application, you can wait weeks or even months to find out if your loan has been approved.

Banks are cautious and want to make sure they get their loan repaid. As a result, they generally prefer you have assets in place that can be tapped if necessary. Many require collateral, such as equipment or real estate, in order to extend a loan. Even if you have these assets, asset-based financing has some serious disadvantages (learn more here). If you don’t have assets, bank loans may not be your best choice.

Online Lenders

In recent years, dozens of online lenders have sprung up to help small business owners find business loans more efficiently. While online lenders do have some advantages, they’re actually not as different from traditional bank loans as you may believe.

On the plus side, online lenders do save you a lot of time. While traditional banks may require paper documents (how old-fashioned!), online lenders have you apply online, which is much faster. If additional information is needed, you can quickly get it to the online lender instead of mailing, faxing, or bringing it in to the bank.

However, just like banks, many online lenders require collateral in order to make a loan. That can make online lending a poor choice for any business owner who doesn’t want to put up collateral or doesn’t have the assets to do so.

The fine print in online lending agreements can also be an issue. Many online lenders get you to their websites by touting low interest rates. However, these low rates often come with hidden fees or high penalties for missed or late payments. In addition, some online lenders require daily loan payments. This can cause major cash flow problems if your business’s sales fluctuate from day to day.

Finally, online lenders sometimes encourage you to take out a larger loan than you really need. This can be tempting, but it can also lead to repayment problems, penalties, and fees.

Invoice Funding

Invoice funding differs from bank loans because it is based on the value of your business’s invoices. This makes it an excellent solution for any small business owner in need of working capital or suffering from a temporary cash crunch.

With invoice funding, you control the situation. Finance as little or as much as you need. You can get an advance on the value of just one invoice, or all your outstanding invoices—the choice is up to you.

Like online lending, you apply for invoice funding online. However, there are far fewer hoops to jump through. Just create a free account and link it to your businesses’ accounting app. If approved, choose one or more outstanding invoices, and that amount is transferred to your bank account in as soon as one business day. The speed and ease of the process makes invoice financing a perfect solution for those times you need money in a hurry.

Unlike bank loans with lengthy repayment terms, or online loans with onerous daily repayments, you pay back the proceeds of your invoice funding in weekly installments—optimal for most businesses’ cash flow needs. Twelve- or 24-week terms are available so you can pay your debt off quickly. Want to pay off the loan even faster? You can pay it in full without incurring any additional fees.

Finally, invoice funding can be ideal for a startup business seeking financing. Tapping into your outstanding invoices can power up your startup growth. Find out more about how invoice funding can help a startup.

Rieva is a small-business contributor for Fundbox and CEO of GrowBiz Media, a media company focusing on small business and entrepreneurship. She has spent 30+ years covering, consulting, and speaking to small businesses owners and entrepreneurs.