Line of Credit
A revolving loan that provides a fixed amount of capital and that can be accessed when needed. Unlike a traditional term loan, all or part of a line of credit can be accessed on demand up to a fixed limit. The borrower pays interest only on the outstanding principal amount in use.
Merchant Cash Advance
While not technically a loan, a cash advance typically does not require a true Personal Guarantee so may be riskier for the lender. Cash advances generally do not have a set term, payment schedule, or stated interest rate like a traditional loan. Instead, cash advances typically have a total payback and purchase a fixed percentage of the borrower's future cash receivables.