CHOOSING A PRODUCT
Term loan vs.
line of credit.
They both put capital in your hands — but they behave like completely different tools. Pick the wrong one and you'll either overpay or come up short.
The short version
- Term loan: one lump sum, fixed payback. Best for a single, defined expense.
- Line of credit: a revolving limit you draw from as needed. Best for ongoing or unpredictable needs.
- You pay interest on a term loan's full balance; on a line, only on what you draw.
- Many owners use both — a loan for the big move, a line as a standing buffer.
The core difference
A term loan hands you the entire amount at once. You repay it on a fixed schedule over a set term, and you're paying interest on the whole balance from day one. It's a single, decisive transaction.
A business line of credit works more like a credit card built for your business. You're approved for a limit, but you only draw — and only pay interest on — what you actually use. Repay it, and that credit becomes available again. It's not one transaction; it's a tool you keep on the shelf.
One is a purchase. The other is a capability.
When a term loan wins
Reach for a term loan when you know the number and you need all of it now:
- Buying equipment, a vehicle, or a buildout
- A bulk inventory purchase at a discount
- Consolidating higher-cost debt into one fixed payment
- Any one-time investment with a clear price tag
Because the cost and schedule are locked up front, a term loan is the easiest product to plan around. You know the payment and the payoff date before you sign.
When a line of credit wins
Reach for a line when the need is ongoing, recurring, or impossible to schedule:
- Covering payroll or rent during a slow stretch
- Managing seasonal swings in cash flow
- Jumping on a rush order or a supplier discount
- Keeping a safety net open that costs nothing until you draw
The flexibility is the whole point: an unused line is free to keep, and you never pay for capital you didn't touch.
Still on the fence?
An advisor can look at your numbers and tell you which structure costs you less — in about ten minutes.
A quick gut check
Ask yourself one question: "Do I need a specific amount once, or access to cash repeatedly?"
- Once, for a known amount → term loan.
- Repeatedly, in amounts you can't predict → line of credit.
And if the honest answer is "both" — that's common, and it's fine. Plenty of owners fund a major move with a term loan while keeping a line of credit open as a buffer for whatever the month throws at them.
What they have in common
Whichever you choose, the path with Titan Capital is the same: a ten-minute application, three recent bank statements, a soft credit check that won't touch your score, and — once approved — funding typically within 24 to 48 hours. As a consultancy, we'll match your file to lenders and bring back the option that fits, not just the one that pays us.
See both options for your business
One application shows you what you qualify for across products. No obligation either way.