What is the difference between a term loan and a revolving credit?

What is the difference between a term loan and a revolving credit Introduction: The World of Business Financing Hello everyone, and welcome to today's video. When it comes to financing a business, there's a myriad of options available. From traditional bank loans to alternative funding sources, each has its own set of advantages and considerations. Today, we'll be focusing on two popular choices: term loans and revolving credit. By the end of this video, you'll have a clear understanding of their differences, benefits, and how they can impact your business's financial strategy. Defining Term Loans: A Fixed Commitment Let's start with term loans. As the name suggests, these are loans with a predetermined term or duration. When you secure a term loan, you receive a lump sum amount, which is then repaid over a set period. This repayment can be structured in various ways, such as equal monthly installments or even balloon payments. One key aspect of term loans is their fixed interest rate. This means that throughout the loan's term, your interest payments remain constant, allowing for easier budgeting and financial planning. The Flexibility of Revolving Credit