Line of Credit
A business line of credit is quite similar to personal lines of credit such as credit cards. It is often used by businesses to meet large and unforeseen variable costs.
Lines of credit can be secured or unsecured and are often referred to as “revolving,” which means borrowers can tap into them again and again. For example, if you have a $25,000 line of credit and take out $15,000, you will still have access to the remaining $10,000. If you pay back the $15,000 you will go back down to $0 and have access to the entire amount without having to reapply
A Business Loan
A small business loan allows you to borrow a substantial sum of money for business purposes. The sum is paid to you all at once and you are required to return it within a specified period of time. The loan term can range from a year to 20 years.
You may select term loans with different repayment periods and with fixed or variable interest rates. Traditional lenders such as banks offer business loans for around 5 percent to 12 percent interest. Online lenders or marketplaces tend to charge a higher interest rate.
