Almost all small business owners need to find external sources of funding for their business at some point. This usually entails borrowing money. Commercial financing can be a complex topic to approach if you are unfamiliar with the lending terms involved. Here are a few of the most important lending terms you’re likely to run into as you look for ways to finance your business.

Term loan: A term loan is a one-time loan for a fixed amount of money. If you take out a term loan, you can expect to pay it back with interest over a period of several years.

Amortization: This term refers to the process of paying off a loan in regularly scheduled installments over time. Each installment involves paying off some of the principal (that is, the sum of money your business initially borrowed) plus paying some interest to the lender.

Income statement: An income statement is a financial document that covers a certain time period. It lists your business’ income and expenses over the specified timeframe. These statements are also called profit and loss statements. You will likely need to provide an income statement, among other documentation, when applying for a loan.

Business line of credit: A business line of credit is a common alternative to a term loan. When you take out a business line of credit, you have access to capital if you need it. However, you don’t have to worry about paying interest on more capital than you need at once.

Business credit report: This is one of the most common lending terms you’ll come across. You’re probably already familiar with how credit works through your personal credit. Just like individuals, businesses also receive credit scores. Your score can range from 0 to 100, with higher numbers indicating greater trustworthiness. The better your business credit is, the more easily you will be able to take out loans.

SBA loan: SBA loans are designed specifically to meet the needs of small businesses. The Small Business Administration partially guarantees these loans, making them less risky for the lender.

Secured and Unsecured Loans: An unsecured loan does not involve any collateral, such as property, from the borrower. These loans are based solely on the borrower’s credit. A secured loan, on the other hand, does involve collateral. If a borrower defaults on a secured loan, the lender can seize the collateral to recoup their losses.