A Line of Credit and a Term Loan are Different Things
August 24, 2011
| By: Sean Murray
Posted on July 27, 2011 at 12:22 AM
According to Gary Honig on Lendio.com, business owners sometimes ask for one type of financing but describe another. Get the facts and make sure you get what you need:
A line of credit (LOC) is usually considered a short-term loan. The payments are interest-only, based on the outstanding funds in use.
A term loan is a fixed, funding transaction. It is a one-time loan based on cash flow of the business plus certain collateral pledged against the loan.
Last modified: February 21, 2013
