When a line of credit beats a term loan

Three operator scenarios where revolving credit pays for itself.

Lines of credit win when the cash need is recurring but unpredictable. Payroll bridges, inventory restocks, and project-start materials are the canonical use cases.

A term loan locks you into a payment whether you needed the full amount or not. A line lets you draw only what you need and pay interest only on the outstanding balance.

The tradeoff: lines have stricter qualification (FICO 600+, 12+ months in business, $20K+ monthly revenue), and the limits are often lower than what you'd qualify for in a term loan.

If you'd use 80%+ of a term loan immediately, take the term loan. If you'd use 40%–60% in waves, take the line.