If you own your own business then you are aware of the endless need for commercial financing to meet your business’s needs and best serve your customers. Most businesses do not have large amounts of money one hand to make big purchases, this is why they need to look into their commercial financing options. Approval for commercial financing is typically easy for larger businesses but for those smaller businesses they often need to look into commercial financing with SBA loans.
What is commercial financing?
Commercial financing is offered by banks or other lending institutions in the form of a loan to a business. Lenders typically offer commercial financing to businesses that have assets to secure the loan. Assets that can be used to secure a loan include real estate, equipment, supplies, and receivable invoices. However, there are unsecured loans available to businesses at are eligible, the lender bases this approval on the regular cash flow coming into the business.
Common uses for commercial financing
- Equipment and supply purchases
- Real estate purchases
- Meet payroll obligations
- Start new projects
The uses for commercial financing are endless, a loan is used to help the business meet their cash flow needs and create new working capital.
Terms and conditions of commercial financing
Interest rates and commercial financing loan terms vary with each individual business, the amount of the loan and the lenders requirements. Most lenders leave the interest rate up for negotiation. With secured commercial financing loans any assets put up on the loan can be seized and sold to cover the cost of the loan if the borrowing business fails to meet their repayment obligations.
How to get commercial financing
- Find a lender that offers commercial financing
- Make sure your business meets the lenders requirements
- Submit an application
- Negotiate the terms and conditions of the loan
- Sign the contract and set up a repayment schedule
Chris Fuller went to the University of South Florida and has worked in the financial sector for over 20 years. He has extensive experience in all aspects of personal and small business lending, from personal loans, equipment finance to cash flow based solutions for small mom and pop businesses, and large corporations.