Working capital or a credit line
Both put money in your business account. The difference is when you take it and what you pay on.
Working capital is one amount, now
You get the full amount up front and pay it back over a set term.
It fits a need you can put a number on today. Payroll while you wait on a draw. Materials for a job you already won. A slow month you can see coming.
A credit line is a limit you draw from
You are approved for a limit and take only what you need, when you need it.
You pay on what you have drawn, not on the whole limit. As you pay it down, it opens back up.
The same restaurant, two needs
A restaurant needs $30,000 for a new walk-in this month. That is one amount, known today, so working capital fits.
The same restaurant wants a cushion for whatever breaks next. Nobody knows that amount yet. That is a line.
Do you know the amount?
If you do, working capital is simpler. You take it once and you know the payment.
If the amount depends on what breaks or which order comes in, a line fits better.
Is it once, or again and again?
One job, one season or one repair points to working capital.
A need that comes back every few weeks points to a line.
How soon do you need it?
If it is this week, look at what is in front of you first.
A line is worth setting up before the day you need it. Then it is already there when the cooler dies.
When it is neither
If the money is for one machine, look at equipment credit. The seller gets paid and the machine backs the deal.
If you are waiting on a customer to pay, look at an invoice advance. You get most of the invoice now.
You don't have to pick before you apply
Say what the money is for. What your business could get shows up in your portal, each one with its amount, term and payment.
You compare them there and choose. Your advisor can walk you through them if you would like a second opinion.