Business Line of Credit vs. Loan Comparison
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What Is a Business Loan?
Types of Business Loans
Rates: 3.5-6.25% Loan amount: $5,000-250,000 Terms: 1-7 years
Small Business Administration Loans
Rates: 5-6% for fixed rates Loan amount: $500 to $5.5 million Terms: up to 25 years
Merchant Cash Advance Loans
Rates: 1.10-1.45 Factor Rate (not an interest rate) Fees: 1-3% of loan amount Loan amount: up to $500,000 Terms: 3-24 months
What is a Business Loan?
Pros of a Business Loan
Cons of a Business Loan
What Is a Business Line of Credit?
Rates: from 3.75% Fees: 0-$150 Credit line amount: $5,000 to $250,000 Terms: 3-24 months
Pros of a Business Line of Credit
Cons of a Business Line of Credit
Exploring Business Loan Options
How much money do I need? Loans may be a better choice if a large sum is needed. What will I use the money for? Business loans generally come with restrictions attached to what the funds can be spent on. Do I need it all at once, or spread out over time? A loan amount can be disbursed as a lump sum and a line of credit tapped into only when needed. How much can I afford to pay in loan payments each month? A line of credit could require fewer payments, if only some of the approved financing gets withdrawn. How fast do I need the financed money? If you need access to funds at different times, a line of credit may offer more financing flexibility—as it can be tapped when needed. What financing options do I qualify for? If you’re not certain whether you qualify for a business loan or line of credit, you can research different lenders' requirements to get a clearer idea of the various factors they weigh.
Business Financing That Suits Your Business
Frequently Asked Questions
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