Do you need a commercial loan??
Commercial Lending – There are multiple types of loans that can be used to start or expand your business. Below are just several options, we have expertise available to answer your questions.
- Credit Lines
Under a credit line agreement, the lender supplies a business with funds intended to fill temporary shortages in cash used to finance inventories, receivables, project or contract related work.
- Short Term Loans
Short term loans are used for seasonal build-ups of inventory and receivables. Generally they are repaid in a lump sum at maturity, made on a secured basis and are for a term of a year of less.
- Contract Financing
Funds are advanced to you as work is performed. Payments by the contracting party are generally made directly to the lender.
Factors actually buy your receivables and rely on their own credit and collection expertise. Essentially, your customers become their customers. Factoring is used by firms who are unable to obtain bank financing. The cost of financing is usually higher than other forms of S-T financing.
- Term Loans Term loans are used to finance your permanent working capital, new equipment, buildings, expansion, refinancing, and acquisitions. Commercial banks are the major source of funding. The term of the loan is based on the useful life of the assets being financed or collaterized. Your projected profit and cash flow are two key factors lenders consider when making term loans.
- Equipment and Real Estate Loans Loans are fully secured by the equipment being purchased. Typically banks loan 60-80% of the value of the equipment and is repaid over the life of the equipment. Lenders make long term loans secured by commercial and industrial real estate. There are SBA products available both at a fixed and variable rate.
- Leasing Leasing can be accomplished through a bank, leasing or finance company. Your business will be subject to the same type of review as when seeking a loan, specifically cash flow of company, value of lease object and useful life. Lease terms range from 3 to 5 years. At the end of the lease, there are generally 3 options: purchase, renew and return.
Please note that commercial lending is not standardized as it relates to programs and to guidelines. Banks must meet certain federal standards, but the index, margin, amortization, term and fees are components that are controlled by the investor based on their risk profit analysis. Remember that this mortgage will be the greatest expense your investment property will be responsible for. As such we recommend that you consult your real estate agent and your loan officer to assist in providing you with all the information needed to make a complete and accurate choice.
- SBA Small business Administration The U.S. Small Business Administration has delivered millions of loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses