Every business needs funds—cash to operate and capital to grow. The cash addresses the day-to-day operating needs while the capital helps meet long-term financial objectives. For both funding needs, a commercial loan may be the solution.
Reasons to Obtain a Commercial Loan
Generally, a commercial loan is a long-term loan that is expressly used for purposes like buying commercial property such as an office building, industrial building, or retail space. It can also be used for buying an existing business, purchasing equipment, or hiring staff.
What Do Lenders Look for?
To grant a commercial loan, a lender will look for:
• Evidence of satisfactory annual revenue and profits to demonstrate a company’s ability to pay off a loan. That may require up to three years of profit and loss statements.
• The applicant’s personal credit history and a good credit score, along with the business’s credit score.
• Proof of collateral to secure the loan will be required for some types of loans.
• Documentation regarding the use of the intended loan will be required for some types of loans.
• A business plan or a loan proposal may also be required.
How to Improve the Chances for Loan Approval
If you foresee some difficulty in obtaining a commercial loan, your chances of approval may be improved by paying off existing debt to increase your credit score. It may be helpful to pledge additional collateral or to pay a larger down payment. And it can be valuable to add an investor or cosigner.
Types of Commercial Loans
A commercial loan can include a commercial real estate loan, a traditional term loan, equipment financing, a commercial construction loan, a bridge loan, or inventory financing. Each loan type has its requirements and limitations.
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.
