Small-business loans can be either installment loans or revolving loans, depending on the type of loan and the lender’s terms.
An installment loan is a type of loan that is repaid over a fixed period of time, typically with a set monthly payment. The loan is typically fully repaid at the end of the term. Most traditional small-business loans, such as term loans or SBA loans, are installment loans.
On the other hand, revolving loans allow borrowers to access a set amount of funds that they can draw from and repay as needed. As the borrower repays the loan, the credit becomes available again. Credit cards and lines of credit are examples of revolving loans that some small businesses may use.
It’s important to note that some lenders may offer both installment and revolving loans for small businesses. The type of loan that is best for a business will depend on their specific needs and financial situation.