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CommonLending

Term loan vs line of credit

One lump sum on a schedule, or a limit you can draw more than once.

What it is

A term loan fits a defined purchase. A line fits costs that come back, such as payroll or inventory. You usually cannot redraw a term loan after you repay it.

What's typically needed

  • Latest three months of business bank statements
  • Time in business
  • A government-issued photo ID
  • The two options you are actually comparing
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Related: Term loan · Line of credit