Advertiser Disclosure

Options For Term Loans And Line Of Credit For Businesses

Options For Term Loans And Line Of Credit For Businesses Business Loans

The financial market has a lot of options for funding small businesses during times of debt and growth. In order to choose the right option to further the interests of your business or to get out of a tight spot, the two common financial option that many small businesses turn to are lines of credit and term loans. Each of these types is distinct and has its own set of merits and demerits. To choose one of these forms of loans would depend entirely on the purpose of use.

Term Loan: This is the form of a standard loan wherein a lender loans out a certain amount to the borrower that is repayable in regular monthly payments. The term loans have fixed rates and are apt for businesses to buy new assets such as property, vehicles, computer equipment, manufacturing equipment, etc. Using a term loan would be highly beneficial as the purchase of these assets adds to a businesses’ value in a long time.

The line of credit: This form of lending is not the traditional loan of lending funds by a form by which a financial institution could grant an extension of credit like a credit card without having to go through the rigorous process of a loan. The line of credit will be the limited maximum amount up to which a business could borrow based on their specific needs. In a line of credit, the rates vary periodically depending on market factors. This would be helpful for business operating expense when there is a tight cash flow to cover any type of costs.

Term loan vs Line of credit

The primary difference between these two loan forms is the schedule of payment and the amount granted. A loan is a fixed amount dispensed at a one shot and is subject to repayment on a periodic basis, mostly monthly, for a fixed duration of time. In the case of a line of credit the amount borrowed varies with the business needs, and therefore the rates and repayment schedules are not within a set framework.

451 VIEWS

top rated cards

Citi® / AAdvantage® Platinum Select® World Elite Mastercard®

cards
  • Purchases Intro APR
    17.74%
  • Regular APR
    17.74% - 25.74%
  • Balance Transfer Int APR
    25.74%
  • Annual Fee
    $99

Citi® Double Cash Card – 18 month BT offer

cards
  • Purchases Intro APR
    15.24%
  • Regular APR
    15.24% - 25.24%
  • Balance Transfer Int APR
    0%
  • Annual Fee
    $0

Citi® Diamond Preferred® Card – 21 Month Balance Transfer Offer

cards
  • Purchases Intro APR
    14.74%
  • Regular APR
    14.74% - 24.74%
  • Balance Transfer Int APR
    0%
  • Annual Fee
    $0

Citi Simplicity® Card - No Late Fees Ever

cards
  • Purchases Intro APR
    15.74%
  • Regular APR
    15.74% - 25.74%
  • Balance Transfer Int APR
    0%
  • Annual Fee
    $0
Finance

Six Retirement Income Sources For A Peaceful Living

Whether you are planning to retire in the next few months or years later, it is important to ensure that your investments are secured and that you end up receiving a permanent source of income after retirement. Here is a list of six to ponder about: ...
205 VIEWS
Loans

Are Instant Loans a Good Idea

Instant loans are quick-term loans that are regularly used to get over a hard spot. Unfortunately, there are very few situations in which those loans actually turn out to be beneficial. Before you operate one, make sure you recognize the charges and ...
215 VIEWS
Bad Credit Loans

A Highlight On Installment Loans

Installment Loans is a type of loan that must be paid over a scheduled period. For e.g. Mortgage is an installment loan. These are considered safer than payday loans, title loans, and credit cards. A person from Tomball or Washington D.C. can apply f...
235 VIEWS