Many entrepreneurs look for quick funding options in order to boost businesses. But today’s business lending market has so many offers and it’s easy to get lost. Here we will consider two options that business owners can turn to a business line of credit and term loan. Find out about the pros and cons of each offer and understand what is right for you!

Business Term Loan

Why Business Term Loan?

This is a traditional business loan issued with an established payment schedule. Personal Money Service does its best to help get connected with the lenders with the most suitable terms for a business term loan. The borrowers have to pay off the debt usually at the fixed interest. An average loan amount ranges from $25,000 up to $500,000. Interest rates are usually fixed, starting from 7% and reaching 30% (the percentage depends on the lender). Most of the lenders need at least two business days to consider the request and transfer money if they approve the loan.

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Business Line of Credit

Why Business Line of Credit?

A business line of credit is similar to the credit card. It provides you with a capital that you can use for various needs. Closing costs and interest rates tend to be lower than for term loans. Still, Personal Money Service warns you: the missed small business line of credit payments will cost a lot, as they promptly increase the interest. In order to qualify for this option, it is necessary to meet the business line of credit requirements, such as financial ratios, profit, and revenue, time in business, guarantees, and collateral (if you qualify for a secured business line of credit only).

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It is a perfect fit if:

If you have a restaurant and you want to purchase the building near your restaurant and make more space. Plus, you need to add tables and seats to the new room. This is one of the cases when applying for a small business term loan makes sense.

Term loans are good for substantial long-term investments. They are suitable to finance a new business, equipment or other assets purchase, do a construction, expand an existing business, etc. So, term loans are good for big loan-term expenses.

It is a perfect fit if:

If you need to purchase inventory, pay off the debts, and cover seasonal or unexpected expenses, a line of credit will help get more working capital. That is the capital is your life jacket that provides money when you need it.

If you have launched a new project, spent all cash on it and have to pay the salary to employees involved in the project but have no cash on hand. So, the best business line of credit is suitable for short-term investments.


In certain cases, you have a right to choose between fixed or variable interest as some lenders offer to choose the type of interest. You can create the structure of your own payments. Depending on the profit of your business, you can set daily, weekly, or monthly payments. The flexible system allows borrowers to define the size of the payments. Business term loans have larger terms and lower interest than short term loans for business.


You pay interest only for that money that you use. You don’t pay interest on the entire lump of a sum. The loan terms are renewable. If you don’t want to choose a lender by the end of the term, you can renew the contract. You can withdraw money anytime. It’s especially good for business owners, who regularly face ongoing or unexpected expenses.


We bet that you recognized one of the aforementioned situations and realized what option is better for you to finance the business. Your next step is to find a worthy and reputable lender.

And we can help you – just fill in the application form and let us process the information. We work with the wide network reputable lenders so there are high chances to get connected with the most suitable one. It won’t take much time as we do not us for the reasons – only basic and yet essential details are needed.