A business line of credit is revolving credit, allowing you to carry a balance that accrues interest. Think of it in the same way that a Credit Card works. If you don't use the line of credit, you don't have to make any payments. Once you draw from the credit line, as long as you make the minimum payment each month, you can either pay your balance in full or pay whatever you can afford, and keep in mind that your unpaid balance will accrue interest.
Conversely, a business term loan is installment credit. You receive a lump sum and make fixed daily, weekly, bi-weekly or monthly payments on it until it's paid off during a set period of time. You must start repaying the loan right away, whether you use the money immediately or not. Furthermore, unlike personal loans, most business term loans are limited to specific uses. A business line of credit, however, can be used for any business purpose you choose. Finally, term loans are generally available in larger amounts than business lines of credit.
