General Commercial Lenders
Tips & Advice to help you make your decision on General Commercial Lenders
Businesses need capital to buy inventory, expand, develop new products, and build. Sometimes a business' cash flow is not sufficient to fund these priorities. That is where general commercial lenders can help.
Commercial lenders differ from banks that provide commercial loans. Commercial lenders tend to focus exclusively on private companies that are able to make decisions quickly. Commercial lenders can be much more lenient than traditional banks; this flexibility allows them to lend to businesses that might not qualify for a bank loan, but the interest rates are much higher. Commercial loans are often backed by hard collateral: the business' buildings, equipment, or inventory.
Some well-known commercial lenders include GE Capital and Prudential. GE Capital offers asset-based loans for cash flow purposes and has different loan options available for different industries. Prudential loans billions of dollars each year to businesses, and the company takes pride in continuing to lend in difficult economic times.
More traditional commercial lenders include Bank of America and Huntington Bank. Both are regulated more heavily and have higher standards for lending. The loan process will take longer, but your business can usually obtain a better interest rate.
The business that maintains a steady cash flow is able to be more competitive. Increase your business' competitiveness by learning more about general commercial lenders at Business.com.
General Commercial Lenders
Need help financing your growth strategies? Investigate commercial loansBy Judy Artunian, Freelance Writer Commercial loans can come to the rescue when you need cash, whether it’s to develop a new product, to purchase equipment or to refinance an existing loan. And chances are you can find general commercial lenders who will be happy to help fund your growth plans. But before you investigate general commercial lending, learn the practices and lingo of the general lending trade.
Steps that can help you work more effectively with general commercial lenders:
1. Don’t guess how large your loan should be. Determine the amount you need as precisely as possible before you start shopping for commercial loans.
2. Even seasoned business owners can get tripped up by unexpected commercial lending fees and other costly surprises. To accurately compare general lending costs, ask prospective lenders for a quote that includes your total monthly payments, not just interest rates and fees.
3. Pay close attention to the lender’s deadlines, such as the final day for closing the loan. Ignoring important commercial lending deadlines can not only force you to wait longer for the financing you need, it can increase your interest rate.
Contact general commercial lenders who provide the type of loan you need
Most general commercial lenders specialize in certain types of commercial loans. Among the most common: A purchase loan, in which the purchase you finance, such as a fleet of company cars, serves as collateral for the loan. A refinancing loan involves taking out a secured loan to replace your current loan, usually with the goal of lowering monthly payments. A short term bridge loan is taken out for a relatively brief period while longer-term financing is being arranged. A commercial second mortgage gives you a second loan of $50,000-$500,000 on your property, with a term of five to 10 years.
Try:
The commercial lending firm GE Commercial Finance offers second lien loans that can be used for refinancing. Fort Ashford specializes in secured bridge loans for small and medium-sized businesses. CommercialDirect provides commercial second mortgages from $50,000-$500,000.
Double check general commercial lending loan term options
Terms for commercial loans vary. Make sure you can meet the terms before you sign on the dotted line. General commercial lending terms can include requirements that borrowers be in business for a minimum number of years. Advantageous terms to look for in commercial loans include no balloon payment, no penalty for early repayment and no collateral required (also called an unsecured loan).
Try:
Offerings from Beehive Commercial Lending include 20- and 30-year loans with no balloon payment. Nationwide Unsecured features unsecured, “no-collateral” loans.
Too many general commercial lenders but too little time? A broker can help
Commercial lending brokers can help you find the lender for your needs. Brokers charge a fee, but it can pay off since many provide other services, such as advising you on how to increase your chances of getting a loan approved.
Try:
If you want to refinance a mortgage, get free quotes from The-Best-Mortgage-Rate.com. Principle Commercial Corporation handles a slate of commercial loans, including bridge loans and purchase loans. FundingUniverse operates more like an online matchmaking service than a traditional general lending broker. You get help honing your business plan, then your plan is made available to FundingUniverse’s “invite-only” network of lenders and investors.
- Don't let rising costs of commercial loans take you by surprise. Ask general commercial lenders to put a cap on legal fees and other expenses associated with the loan. Also, be sure to lock in your interest rate.
- Before signing on the dotted line with general commercial lenders or brokers, ask them to provide references, including companies that are in your industry, if possible.
- Be confident that you can repay the commercial loans you're considering. For example, the repayment rates for a commercial second mortgage will not only be higher than those for your first loan, but will be due on a shorter term.
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