Business Lines of Credit vs. Term Loans: Which Works Best for Your 2025 Needs?

If you’re a small or mid-sized business owner in Charlotte, NC, you’ve probably found yourself asking the age-old question: “Do I need a business line of credit… or a term loan?”

Don’t worry, you’re not alone — it’s right up there with “Should I get another coffee?” and “Why is I-77 always under construction?”

We get it. As lenders who work with businesses of all shapes and ambitions, we’ve seen firsthand how picking the right type of funding in 2025 can make or break a growth strategy. So, let’s break down Business Lines of Credit vs. Term Loans and help you make the best call for your business — whether you’re running a food truck in NoDa, a tech startup in South End, or a family-owned HVAC biz in Ballantyne.

1. Flexibility vs. Structure

Think of a business line of credit like a business credit card with better terms and fewer strings. It’s revolving, reusable, and ready when you need it. Use it, repay it, use it again — without reapplying.

Term loans, on the other hand, are structured. You get a lump sum upfront, then repay it in set installments over time. Perfect for big, one-and-done expenses. Less flexible — but predictable. You know what you’re paying and for how long.

Charlotte takeaway: If your cash flow’s uneven, a line of credit is your new best friend. If you’ve got a clear project in mind, term loans are the straight-shooting option.

2. Cash Flow Timing

Let’s say you’re preparing for your seasonal rush — hello, holiday retail — but you’ve got expenses now. A business line of credit gives you the ability to spend as needed and repay when your sales spike.

Term loans? They’re better suited for longer-term ROI. Like renovating your storefront or investing in new machinery. Not great for plugging short-term holes.

Charlotte takeaway: Know your timing. Lines of credit love short sprints. Term loans prefer marathons.

3. Cost and Interest

Lines of credit are super handy, but they often come with variable interest rates. The faster you repay, the better. If you like knowing your payment down to the penny every month, a term loan wins with fixed rates and terms.

Charlotte takeaway: If stability keeps you sane, term loans offer peace of mind. If agility is your jam, lines of credit keep you light on your feet.

4. Approval Process

Need cash fast to seize a surprise opportunity or fix a sudden emergency (like, say, your walk-in fridge dying in July)? Business lines of credit are usually quicker to access once set up.

Term loans may take more paperwork upfront, but often come with higher limits if you’ve got the credit and business history to back it.

Charlotte takeaway: For speed and spontaneity, go with the line. For larger, planned investments — term loan it.

5. Best Uses in 2025

Use a business line of credit for working capital, managing payroll, stocking inventory, or taking advantage of bulk deals. Use a term loan for expansions, equipment purchases, or consolidating business debt.

Charlotte takeaway: Many businesses use both — and use them well.

At Viking Funding, we don’t just approve applications — we help business owners in Charlotte choose funding that fits like a glove.

Have questions? Call us at 754-240-8620. We’re not here to sell you anything you don’t need — just to help you figure out what actually works for your 2025.

Why Choose Viking Funding?

Fast & Flexible

Perfect for businesses that need fast cash for 3-24 months with high approval rates and the best terms.

Founded by Industry Professionals

Our specialized focus on Merchant Cash Advances (MCAs) sets us apart. We keep our deep understanding of small business challenges with our passion for helping entrepreneurs thrive.

Incredible Service

Our dedicated team is passionate about helping you navigate the ever-changing business landscape, providing ongoing support and guidance whenever you need it.

A Reputation You Can Trust
★★★★★

"Viking Funding came through for my business when we needed quick funding. The promise of nationwide funding within 24 hours with no credit check or collateral is not just a claim – they deliver. The process is simple, and the free funding analysis call gave me insights without any commitment. If you need fast and hassle-free funding, Viking Funding is a solid choice."

"Viking Funding is a breath of fresh air for businesses seeking rapid expansion. They understand the challenges of traditional banks and offer a quick, paperwork-free solution. The nationwide funding within 24 hours is a game-changer. The free funding analysis call helped me plan effectively. For efficient and responsive funding, Viking Funding is the way to go."

"Viking Funding exceeded my expectations in financing equipment. The process is straightforward, with no credit check or collateral required. The 24-hour funding turnaround is a standout feature. The free funding analysis call is a great resource for understanding available options. If you need funding for equipment without the bank hassle, Viking Funding is a reliable choice."

Frequently Asked Questions

What types of products or solutions does Viking Funding offer?

Viking Funding offers a diverse range of financing options for business owners across the nation. We specialize in Revenue Based Financing, where businesses can borrow based on their monthly revenue. Additionally, we provide business lines of credit, business term loans, and SBA Loans, tailored to meet the specific needs of your business.

What types of businesses does Viking work with?

Viking Funding works with businesses in all industries, understanding that each sector has unique challenges and financing requirements. Whether you’re in manufacturing, retail, services, or any other industry, we have the expertise to support your business goals.

What is needed to qualify?

The qualification requirements vary by the type of financing:

Revenue Based Financing: At least 6 months in business, a business bank account, and 4 months of bank statements showing an average revenue of at least $20,000 per month.

Business Lines of Credit, Term Loans, and SBA Loans: A personal credit score of 700 or above is required, along with the last 2 years of most recent tax returns for the business, a profit and loss statement, and a balance sheet.

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