What’s the difference between a business loan and a business line of credit?

A business loan is a fixed term loan and payment. Therefore, the funds you require are fully paid to you at establishment of the loan. Whereas, a line of credit has a set credit limit and the funds can be drawn up and paid down as you require. Therefore, the interest you pay is based on the drawn down amount of the facility. However, line of credit facilities usually has a higher interest rate than a term facility. As a result, you should ensure the features suit your requirements as they do generally have a higher cost.