A Line of Credit and a Term Loan are Different Things
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
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.