Financing
Should my business use a line of credit or a term loan?
Lines of credit fund revolving working-capital needs; term loans fund defined purchases or projects with scheduled repayment. Match structure to cash cycle.
Educational overview only—not investment, legal, tax, or lending advice. CPS does not provide funding; independent providers make their own decisions.
Line of credit
Revolving access for short-term gaps—inventory builds, payroll timing, seasonal swings. Interest often applies to drawn amounts. Lenders review utilization and renewal criteria.
Term loan
Lump-sum disbursement with fixed or variable rate and set maturity. Suited to equipment, fit-out, acquisitions, or multi-month projects with predictable benefit.
Planning with CPS
Model break-even and illustrative working-capital needs with the sustainability calculator before choosing facility type. Pathway B (capital constrained) often aligns with transaction support plus reinvestment cycles.