For short-term borrowing, a line of credit or a credit card can help you cover business expenses. A line of credit is reusable, and if your borrowing needs vary, you only need to pay back the amount you borrowed. 

There are a few things to know when considering either of these options:

• Interest rates are higher for a credit card than a line of credit
• Credit cards can be linked to a loyalty program such as CIBC rewards, where you can make payments using points you've earned
• Monthly or annual fees may be applicable to both a line of credit and a credit card

For medium- to long-term borrowing, term loans are ideal, as you can typically borrow a higher amount. A loan can help you make a large, one-time purchase with a fixed or variable interest rate. Your amortization period can be up to 25 years, with options to pay back your loan in installments.

Learn more about loans and lines of credit

Blended payments are offered in fixed rates only, as your total principal and interest payments will stay the same for each installment over the course of your loan. Initially, a larger portion of your payments will be allocated toward interest, with the remaining amount applied to your principal. However, by the end of the amortization period, the majority of your payment will be allocated towards the principal. Prepayment would be subject to penalties.

Opting for principal and interest payments allows you to pay back your loan with fixed principal payments, and to prepay without a penalty. Your interest payment for each installment is calculated based on the outstanding amount of the loan. This means your total payments will vary from one repayment period to another – you won’t pay the exact same amount for each installment. 

In each of your payment installments, the amount you pay toward the principal is the same each time. However, your interest is calculated based on the outstanding amount you still owe. As you pay back your loan, the interest amount will gradually decline, and as a result, you'll pay less interest on each payment.

To apply for a business loan, you'll need to connect with your Relationship Manager to discuss your financing options based on your specific business needs. You won't be able to apply online, but your Relationship Manager can help you get started. To find your Relationship Manager, sign on to CIBC Online Banking^® for Business Opens a new window..

Don't have a Relationship Manager? Our expert team of Business Advisors, available through the Business Client Advice Centre, can help start the loan application process. 

When preparing to apply for a loan, you'll need a few documents to support your loan application, such as:

• Financial statements for the last 2 years of business
• Recent business and personal tax returns
• A business plan, if your business is new or starting up
• Two pieces of valid photo ID
• Any other documents required for due diligence