Wondering about the best financing options for your business? This presentation details 8 key differences between loans and lines of credit so you can make the right decision. RapidAdvance Offers Fast, Flexible Small Business Financing & Resources that Promote Success! Find Out How We Can Help YOUR Business GROW and Prosper! Call Today: 877-GO-RAPID or Visit Us Online: http://www.rapidadvance.com/

1. 8 Differences Between Business Loans &
Business Lines of Credit

2. The first building block for managing a business is
capital. Two popular financing options for businesses are
loans and lines of credit.
Which is best for you? This presentation goes over some
of the differences, so you can make an informed
decision.

3.  One time vs. multiple uses
 Payment options
 The difference in the “whens”
 Closing costs
 Monthly payments
 Long-term debt and short-term debt
 Monthly costs

4. -One Time vs. Multiple Uses
 A line of credit can be used more than one time.
 Business loans are used only once.

5. - Payments Options
 With a line of credit, you only make payments on the
amount you have borrowed, so your payment is zero if
your balance is zero.
 When you have a traditional business loan you borrow
the whole amount at once. This option sets you up with
monthly payments that begin right away.

6. -The Difference in the “Whens”
 “When” you get a line of credit – This is something you
acquire before you need it. It is generally not for a
specific purpose.
 “When” you get a loan – This is for a specific purpose
and is only obtained when needed.

7. - Closing Costs
 A line of credit can have minimal to no closing costs.
 A traditional loan can have closing costs that range
from 3-7%, but there are exceptions to every rule.

8. - Monthly Payments
 Monthly payments are usually higher on traditional
loans than they are for lines of credit.
 For example: A traditional loan for the amount of
$75,000 would have a monthly payment of $600-
1000/month more than if you owed the same amount on
a line of credit.
Line of Credit Loan
• Payments reflect only the amount of
money you’ve borrowed. If you have a
zero balance, you don’t owe anything.
• Payment on the full amount begins
immediately, whether you’re using all the
money or not
• Repayment terms and periods are
customized for your business.
• Repayment terms and periods are fixed.
You owe the same amount every month.

9. - Long Term Debt or Short Term Debt
 For short term purposes such as making
payroll, marketing costs, or unexpected cash-flow
issues, lines of credit are best. Although this is great for
surprises, be careful not to exhaust your funds.
 However using your credit line for revenue generating
activities (RGA) is an ideal use for these funds. You’ll
be able to justify new debt you’ve incurred because you
have achieved success by growing your company and
generating additional revenue.

10. - Monthly Costs
 With a line of credit, you have greater flexibility in what
you pay on a monthly basis. You can draw only what you
need, and then pay it down to lower your balance back
to zero.
 With a traditional loan, you would have to pay off the
entire loan balance or refinance, which can carry
additional costs.

11. Summary
With changes in
guidelines, products, and
lenders the world of small
business lending can be
delicate.
Banks are approving less
than 10% of small
business loan
applications these
days, and owners are
looking for alternative
ways of funding their
businesses in order to
make them successful.

12. Let RapidAdvance Help
To learn more about how our
business line of credit can
help your business grow and
prosper, visit us at
RapidAdvance.com.
You can also call us toll-free at
1-877-GO-RAPID to get a free
quote on any of our other fast
and flexible business
financing solutions.