Line of Credit
A business line of credit is similar to personal lines of credit like credit cards. You would be granted you access to a specific amount of financing but would not make payments or incur any interest until you tap into those funds. A line of credit can be either unsecured or secured (typically by inventory, receivables or other collateral).
A term loan is a funding arrangement typically used to fund major capital expenditures. Term loans often unsecured and rely on the creditworthiness of the borrower.