Choosing a product
Line of credit vs. term loan
When flexibility matters more than a lump sum — and when it is the other way around.
Written by Fundrillo Editorial TeamReviewed by Marcus Ellison, Commercial Lending Advisor
Last updated August 1, 20266 min read
These two products solve different problems. Choosing between them comes down to whether you need flexibility or a fixed lump sum.
When a line of credit fits
If your needs come and go — seasonal inventory, occasional gaps — a line of credit lets you draw, repay, and draw again, paying for what you use.
When a term loan fits
If you have one clear, budgeted investment with an expected return, a term loan gives you the full amount up front with predictable payments.