Business line of credit vs. term loan

A term loan pays out a fixed amount at closing and is repaid on a set schedule over a set term. Principal and interest are generally predictable from day one, which makes it easy to model.

A line of credit establishes a limit you draw from as needed. Your balance moves with your needs, and your cost moves with your balance. That flexibility is the whole point — and it is also why a line requires more discipline to manage.

If the money is for one defined purchase with a long useful life — a vehicle, a machine, a build-out — a term loan's amortizing structure often maps cleanly onto the asset.

If the need repeats, fluctuates, or resolves itself when a receivable clears, a line avoids paying interest on capital you are not using. Many established businesses end up using both, for different purposes.

Comparing a line and a loan on advertised APR alone can be misleading, because the amount of capital outstanding differs over time. A line charged only on drawn funds and a loan charged on the full principal are not directly comparable without modeling actual usage.

Ask for the full picture: how interest is calculated, whether there are fees, and how repayment works. If a term is not disclosed, treat it as unknown rather than assuming a typical value.

Our advertised product is a business line of credit from $25,000 to $750,000, with APRs starting at 8.99% and closing and funding as quickly as 5 days. Fees, repayment schedules, and draw periods are not published here because they are set by the terms of an approved facility, and we do not invent them to fill a page.