Term loans are a good option to provide fixed asset financing for business equipment or commercial real estate. They are a static loan for a specific use. Crestmark offers various options for financing equipment using term loans including a type of SBA loan.
Term Loans and Lines of Credit
The major difference between a term loan and a line of credit is the flexibility of the funding available. Term loans are designed to pay for fixed assets. They are not intended to be a source of ongoing working capital. Under a term loan agreement, you receive a set amount up front and then repay it over time. Typically, the term loan is secured by the fixed asset that is being financed. A line of credit is a better choice for working capital. Lines of credit are much more dynamic and capable of being increased or reduced as your business circumstances change. As you are hiring more people and/or filling more orders your invoices will naturally increase, allowing Crestmark to increase your funding as a result. With more funding, you’ll have the capital you need to meet your orders and continue driving your business. This kind of flexibility to match your current needs is a hallmark of lines of credit and is completely absent from term loans.
Whether you’re looking for a term loan to assist with a major equipment purchase or a line of credit for your working capital needs, Crestmark stands ready to help. Contact one of our lending specialists to learn about the options we have to suit your business.