Direct answer
A term loan gives you a fixed lump sum repaid on a set schedule, best for a planned one-time investment. A line of credit is revolving capital you draw and repay repeatedly, best for recurring or unpredictable gaps. A revenue advance gives you upfront capital repaid as a share of your sales, best when you need money quickly and your revenue is steady but your credit profile is not.
How we compare your options
We start with three questions, in this order: what is the money for, when do you need it, and what does your repayment capacity actually look like next quarter. Speed and approval odds matter, but they are the tiebreaker, not the starting point. The cheapest capital you cannot qualify for is not an option, and the fastest capital you cannot comfortably repay is a problem you have not had yet. Every comparison below is about fit, not about which product is "best."
Comparison table
| Revenue advance | Term loan | Line of credit | |
|---|---|---|---|
| Best for | Fast access when revenue is steady but credit or documentation is thin | A planned, one-time investment with a clear payback | Recurring, unpredictable, or seasonal gaps |
| Typical amount | Scaled to monthly revenue, commonly a fraction of a month's deposits | Larger, set at underwriting against the use of funds | A ceiling you draw against, often modest to start and raised with history |
| Speed to fund | Fastest of the three, often as little as one business day once documents are in | Slowest, more documentation and review | Slow to open, then instant on every draw after that |
| Repayment | A fixed percentage or fixed daily/weekly amount tied to sales | Fixed installments over a set term | Interest on what you have drawn, revolving as you repay |
| Cost structure | Factor-based, priced as a total cost of capital rather than an annual rate | Interest rate plus fees, lowest cost of the three when you qualify | Interest on the drawn balance only, plus possible maintenance or draw fees |
| Main tradeoff | Speed and accessibility in exchange for the highest cost | Lowest cost in exchange for time and documentation | Flexibility in exchange for a smaller ceiling and ongoing qualification |
Amounts, speed, and cost vary by lender and by your file. Nothing here is an offer or a quote.
When is a term loan the right choice?
A term loan fits when you know the number and you know the payback. Buying a second production line, funding a build-out, acquiring a smaller competitor, consolidating a specific planned expense: these have a defined cost and a defined return, which is exactly what a fixed installment schedule is built for.
It is the lowest-cost option of the three when you qualify, so it is worth the extra documentation time if your timeline allows it. If you are choosing a term loan mainly because it is cheap, but the money is really covering an ongoing gap, you have picked the wrong product. Recurring needs belong on a line of credit.
SBA-backed term financing sits at the far end of this spectrum: the longest process and the most paperwork, and in exchange the longest terms and the lowest cost. SBA 7(a) loans go up to $5 million (SBA.gov). See our SBA loans page for what that process actually looks like.
When is a line of credit the right choice?
A line of credit fits when the need repeats and the amount changes. Seasonal inventory builds, payroll timing gaps, waiting on customer payments, materials for a job you have not been paid for yet. You draw what you need, you pay interest only on that, and the capacity comes back as you repay.
The honest limitation: a line is usually the hardest of the three to open at a size that solves a large problem, and lenders reassess it. If you need a specific large sum once, a term loan is the cleaner tool. If you need $40,000 nine times a year in unpredictable amounts, nothing beats a line.
More detail on the business line of credit page.
When is a revenue advance the right choice?
A revenue advance fits when speed is the binding constraint and your sales are consistent. Repayment is tied to a share of revenue rather than a fixed installment, so it flexes with slower weeks in a way a term loan does not. Underwriting leans on deposit history more than on credit score, which is why it is often available when the other two are not.
It is also the most expensive of the three, and we will tell you that before you sign anything. A revenue advance is a good answer to "I have a profitable use for this money in the next 30 days." It is a bad answer to "I am short every month." If the underlying problem is structural, more expensive capital makes it worse, faster.
We do not recommend taking a revenue advance on top of existing advances to stay current on those advances. If that is where you are, the conversation we should have is about restructuring, not about another advance. See the revenue advance page for how the product works.
What if more than one fits?
Often two do, and the deciding factor is timing. A common pattern: use a revenue advance or bridge to move now on a time-sensitive opportunity, and put the longer-term financing in place behind it once there is room to do the paperwork properly. Our bridge loan page covers that sequence.
The other common pattern is that none of the three is the right tool. If the real issue is unpaid invoices, invoice factoring addresses the cause instead of the symptom. If it is a machine, equipment financing is usually cheaper than borrowing generally and buying it.
FAQ
Not sure which of the three fits?
Tell us what the money is for and when you need it, and we will give you a straight recommendation, including when the answer is "none of these yet."
Talk to an advisor