commercial 

lending

Whether your business is cyclical, seasonal, or both, the reality is that there will be times you just don’t have the working capital you need to cover all of your expenses. How will you get the extra cash you need? That’s where commercial lending comes in.

what is a commercial loan?

If you’ve been in business for a while, you may have already engaged in commercial lending without knowing it by name. Commercial lending is any lending that is extended towards a business rather than an individual. Typically, commercial loans are used to fund short-term or one-time expenses, but they can also be used for long-term, day-to-day expenses, such as labor.

who are commercial lenders?

There are tons of commercial lenders to choose from and you’ll find they all have different lending criteria and terms. Be sure you do your research before committing (including reading the reviews if it’s an online lender) to make sure your loan fits your business.

 

Some examples of commercial lenders are:

 

  • Commercial banks

  • Mutual companies

  • Hard money lenders

  • Private lending groups

  • Credit unions

how do i apply for a commercial loan?

  1. Define What Your Loan is For
    Knowing what your loan is for will be essential for deciding for which loans to apply. Do you need a one-time fix or are you considering a renewable loan for seasonal production? Will you be using the money for payroll expenses over the next 10-15 years or do you need a short-term bridge loan in a pinch to quickly cover an expense? 

     

  2. Know Your Worth
    Once you’ve decided what you need, you’ll need to evaluate what you’re worth. Commercial borrowers usually undergo intense financial scrutiny when applying. Your loan will likely require insurance in addition to collateral and your loan’s value will hinge upon what you bring to the table. While every lender will have their own terms, getting a general sense of your business’ value as a borrower will help you close the deal.

 

   3. Prepare Your Application

      After you’ve settled on what you need and what you can reasonably ask for, it’s time to start applying! As     

      mentioned earlier, there are many lenders out there for you to choose from, each with their own application

      criteria. To help you get started though, here is a list of frequently requested documents you should have

      prepared for any lender:

 ​​

  • Business plan

  • Loan plan

  • Business tax ID and returns

  • Personal income tax returns

  • Financial statements (i.e. income statement, balance sheet, etc.)

  • Business and personal credit reports

  • Business and personal bank statements

  • Collateral documentation (i.e. deed)

  • Business legal documentation (i.e. business license, partnership contracts, etc.)

  • Your Resume

  • References

Despite the numerous small business lenders out there, nearly a quarter of all small businesses were not able to secure financing in 2017.

 

Plus, only 15% of small businesses who did acquire funding in 2017 were able to secure that funding from a bank. It’s an interesting conundrum for small businesses - culturally, it’s understood that in order to be in business, you have to take out some sort of loan.

 

But maybe it’s time for the culture to adapt.

THINK YOU NEED A LOAN? CALL US FIRST. 

1-855-674-7787

Many small businesses think they need a loan - but there might be a different way to expedite your cash flow. 

CONEXT® may be your small business solution.

CONEXT® is not a lending product and we don’t run your credit score, require collateral, or charge APR/interest fees. With our Mobile Load and CONEXT® Visa® Prepaid Card, you can access the funds on your company checks in real-time at one transparent cost. This means if you are seeking a loan because of cash flow problems, for example, CONEXT® can expedite that cycle and give you the access you’re actually seeking.

Want more info? Call us at 1-855-674-7787 or click here to learn how CONEXT® is the right business solution for you. 

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