Commercial Finance

Commercial finance is a broad term that’s used to classify the function of offering loans to business entities.  Typically commercial finance is offered by banks and private finance companies in the form of loans that are secured by company assets.  In recent years some lenders do offer commercial financing solutions that are unsecured, but it’s not a common part of the commercial financing sector.  If the commercial finance loan is unsecured the lender relies on the cash flow of the business to repay the unsecured business loan.

At businessfinanceapp.com our lenders offer an extensive variety of commercial finance options.  These business loan solutions include the following:

Commercial Mortgages, Term Loans, Hard Money Loans, Accounts Receivables Lines of Credit, Bridge Loans, and ABL lines of credit, and Inventory Loans.

Most business loan seekers utilize commercial financing solutions to obtain working capital by using existing company assets.  The business loan is secured by accounts receivables, real estate, buildings, equipment, inventory or other company assets.  This allows the business to grow and ease cash constraints by borrowing against the assets of the company. 

Who’s a fit for Commercial Finance?

Just about any business entity that is in need of working capital could be a good fit for commercial finance products.  Since all types of lenders offer commercial finance the credit criteria and credit box of the lenders can be very different.  Just about all banks will have typical bank credit requirements since they are subject to audits by the Federal Reserve.   If your company does not have profitability and a positive net worth its unlikely any bank will approve the business loan.  Non bank lenders tend to offer more flexible commercial financing options for companies that do not have perfect credit risk.  We have hundreds of lenders within our network that offer commercial finance products secured by company assets for businesses that are higher risk credits.

As with just about all loans, the higher the risk for the lender the higher the cost of financing.  Banks offer the most competitive interest rates for commercial finance solutions so if you can qualify for a bank credit facility that should be your best option.  It’s also important to check several banks to compare the cost of financing.  Rates can be very different from bank to bank so it’s critical to shop the deal.  Many of the non bank commercial finance providers have been getting more and more competitive with interest rates.  Just like with banks it’s very important to look at several non bank business lenders before making a final decision.  The cost of financing between non bank lenders can vary by up to 50% or more so shopping the deal is the only way to find the best overall deal for your working capital needs.

Hopefully you found this review of commercial finance helpful.  Our network of lenders contains many forward looking business lenders who will consider the future of your business while reviewing the loan package.  We welcome your call if you have questions and want to talk with one of our business loan experts.  If you’re ready to apply for a commercial finance quote simply use the form on the right side of the page. 

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