What are Commercial Loans?

Commercial loans are a specific type of business loan, one that is typically used for large capital expenditures – which are funds specifically for purchasing, upgrading or maintaining major assets such as industrial buildings, equipment and property.

Often, to acquire this type of loan a business will need to put up collateral. Collateral can mean several things, but property, physical buildings, machinery or equipment are the most common. Less frequently, a business can also use revenue from accounts receivable as their collateral.

Are Commercial Loans Short Term?

While it’s true that commercial loans are frequently issued as a short-term loan, they can also come in the form of “renewable commercial loans.” These types of loans can extend for an indefinite amount of time and give a business the funds it needs to maintain daily operations while also having cash to repay the loan as necessary.

This can be helpful for any business that needs fast funds to meet high seasonal or temporary demands while also maintaining regular output and operations – a renewable commercial loan will supply the funds required for the increased production and sales from that output can then be used to repay the loan.

How to Apply for and Secure Commercial Loans

To secure and maintain the terms of a commercial loan, many of the requirements are similar to that of any other loan. A stable credit history and credit rating will be one of the major deciding factors in if your company will be approved. However, even those businesses with poor credit or no credit are likely to still have options with the right lending institution.

Documentation of earnings and cash flow are also typically used to show your lender that you have the ability to repay the loan. Once your business is approved for a commercial loan, you can also expect to provide monthly statements showing earnings and may also need to acquire and show proof of insurance for any property or equipment that is purchased with the funds.

Choosing Commercial Loans for Your Business

When it comes to lending, your business has a variety of options. At Mortgage Solutions Group we provide comprehensive resources, professional guidance and competitive rates and terms to ensure you get the solutions that will work best for your company. For general information and application guidelines on commercial loans, call us at 1-888-233-6164.

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