Should I Get a Fast Business Loan or Line of Credit?

If your business can use working capital, you're probably asking - Should I Get a Fast Business Loan or Line of Credit? 

Having access to business financing is really important, but how do you decide whether to get either a fast business loan or a business line of credit; 

How to choose a Fast Business Loans and Business Line of Credit:

Before trying to make any decisions, it's important to know what each option really means: 

A fast business loan vs a business line of credit.

Fast Business Loan:

A business loan that you'll get from an online lender, will give you the money you need upfront. It is a great option for when you need working capital for a specific purpose, like expanding your business, making a purchase, or paying expenses.

Business Line of Credit:

Lines of credit, on the other hand, give you access up to a set limit, where you can draw funds depending on how much you need. This works somewhat like a credit card, at any time, you have access to get the money on it when needed, pay it off, and use the credit line again. Just like a credit card, the lines of credit available online will charge you a monthly rate, making it a great option if you'll be able to pay it down within a couple of months.

To help you with this, consider the following to make a choice between a fast business loan and a business line of credit consider the following:

1. Immediate Need vs. Ongoing Access: Determine whether access to capital is immediate or ongoing. If you need funds for a certain project or specific expenses, a fast business loan may go through the more suitable option. But if you foresee recurring expenses or simply want to have an available financial safety net, a business line of credit offers ongoing access to capital.

2. Rates: Fast business loans have a flat cost of capital, but the rates on a line of credit will be based upon how long it takes you to pay it off. So, if you pay off the loan early, it will be quite cheap, but if it takes you a while, it can get more expensive.

3. Payments: Fast business loans have set debits for paying back the loan, meaning you will pay off the loan in a set period of time ranging between 3-24 months. In contrast, the business line of credit will enable you to use the credit line whenever you want and the payments will depend on how much use and how fast you decide to pay-down the balance.

Keep in mind that a business loan is easier to get approved, so if you don't have the best credit score, or if your business hasn't been open for a nice amount of years, you should probably go for a business loan rather than a line of credit.

Crystal Business Funding works with business owners that have any Credit score. We believe in helping all businesses, not only the ones with the top credit score. So we look at other factors to assess risk.

Conclusion:

Whether you decide between a fast business loan or a line of credit it will depend on your business needs, and obviously what you're eligible for. Choosing between these two options is something Crystal Business Funding can definitely help you decide.

Whether you require immediate funds or ongoing access to capital, Crystal Business Funding will get you the funds you need to manage & grow your business.