Getting a business loan or business lending is critical for most (if not all) businesses to thrive and grow. There are many reasons for a business to seek financing including purchasing inventory, expanding the business, securing a new location, purchasing equipment, hiring additional human talent, improving a businesses’ cash flow, expanding or increasing marketing and sales actions, credit card financing, and paying mortgages.
What is Business Lending?
Business lending is simply the process whereby a business borrows funds from a lender and the lender then expects repayment plus interest over a defined time period. Lending can also involve another asset, either as the reason for the loan or as collateral for the loan.
Sources of Business Lending
Typical sources of business lending include banks and credit unions. However, there are other financing sources including peer-to-peer lenders, family and friends, SBA loans, equity financing, Angel investors, Venture Capital funding, merchant cash advances, inventory financing, and alternative lenders.
Business Lending Considerations
It is important to consider these factors when considering how to pursue business lending because they will influence the type of lender that you will need:
What the funds will be needed for? And will the funds need to be used for capital asset or operating purposes?
How much money will need to be borrowed?
Will there need to be any collateral applied to the loan? (Collateral can improve the terms of the loan.)
How long will you need the funds?
What interest rate and terms will be acceptable to you?
Business Loan Financing Mistakes to Avoid
When pursuing business lending, it is important to avoid some common mistakes. These include the failure to carefully examine the financial condition of the company, the mistake of selecting the wrong loan type, not comparing loan offerings to get the most favorable terms, or making the repayment period too short.
Seek Expert Financing Assistance
Contact the business lending experts at DAL Commercial Capital, based in Wallingford, CT. We offer many different loan types for small and large businesses. Our experienced and certified financing professionals can help you get the loan you need.