Because of the enormous amount of sail related to the ships size, merchant sloops were very fast, but due to their small size they couldn't take large amounts of cargo. So they were mostly used for carrying small precious items, like gold or diamonds. With just over 10 cannons, the merchant sloops in East India Company are lightly armed for defence against minor, so they should avoid a confrontation with serious enemies. In a thight situation, a sloop should try to outrun its enemy, using the ability to outmanoeuvre large vessels. Due to their cheap price, they are good ships to start with.
Schooners are fast ships that are well suited for trading and scouting. They have enough light cannons to be a threat to merchant ships, especially in large numbers. This makes them suitable for piracy and many pirates employ them as small fleets, quickly attacking lone cargo ships without escort.