Line of Credit vs Term Loan: Which Fits Your Business?

How One-Time Funding Works

With a term-based product, the business receives a single disbursement and repays it on a set schedule over an agreed term. The amount, the payments, and the term are fixed by the agreement. This structure suits a defined need with a known cost, such as a specific equipment purchase or a planned expansion.

At The Final Loans, this is Business Funding: unsecured funding from $10,000 to $1,000,000 with terms up to 5 years.

How a Revolving Credit Facility Works

A revolving facility is useful when a business may need capital more than once rather than receiving a single fixed disbursement. The approved credit limit is the maximum facility amount, while available credit can change as the facility is used and repaid under the agreement.

At The Final Loans, this is the Business Line of Credit: credit limits from $10,000 to $2,000,000, terms up to 5 years, and an average interest rate of 3% to 13%.

When One-Time Funding May Fit

• You know the exact amount you need
• The need is a single project or purchase
• You prefer one fixed repayment schedule

When a Revolving Facility May Fit

• Expenses and incoming revenue do not arrive on the same schedule
• Your needs are seasonal or recurring, such as inventory before a busy period
• You want access to capital without applying again each time

What Both Programs Share

Both programs are offered directly by The Final Loans, with no upfront fee and a typical funding timeline of same day. Both ask for the same application materials: a completed business loan application and the recent 3 months of business bank statements. The minimum time in business is 6 months for both. The minimum credit score is 600 for Business Funding and 650 for the Business Line of Credit.

Compare the Full Cost

Whichever structure you choose, compare the full obligation: the amount you receive, the rate, any fees, the payment frequency, the term, and the total repayment. Our guide to comparing funding costs explains each step.