Business Loans and Lines of Credit: How They Work in the US

If you’re researching business loans and lines of credit, the direct answer is this: a business line of credit is a revolving account that lets you borrow, repay, and re-borrow up to a set limit, while a term loan delivers a one-time lump sum repaid on a fixed schedule [1][3]. According to the U.S. Small Business Administration (SBA), partner lenders issue SBA-guaranteed financing including 7(a) loans and microloans of $50,000 or less, with lower down payments and competitive terms [2]. Knowing the difference helps you match the right tool to your cash-flow needs.