subject: Commercial Loan Financing - Advance For Your Credit Needs [print this page] Commercial loan financing is a convenient option to meet the financial needs of the small or medium-sized businessmen. These advances can be used to meet any business requirements.
Business is risky. There are many ups and down. Uncertainty is a part and parcel of life.
The finance obtained under these loans can be used for starting a new business, expansion, paying off earlier business debts, purchasing raw materials, and for purchasing a commercial property. The credit requirements can be varied. One thing you should keep in mind is that these loans offer finances when you need it the most, at the best terms and condition
Sole proprietors find it extremely difficult to arrange for funds as they do not have any assets to pledge.
The lender decides the amount to be sanctioned depending upon the borrowers credibility and financial standing in the market. Generally credit is sanctioned ranging from 5000 - 500,000 for a period of 5 25years.
Commercial loan financing is granted as secured or unsecured.
If the borrower applies for secured credit, he has to place some asset of his as security against the loan amount. He is therefore charged a lower rate of interest. Incase the borrower defaults in repayment, the lender can sell the security and recover the money.
If the applicant applies for unsecured credit, he does not place any security against the credit granted. The advance is granted only on the personal guarantee of the borrower. If the borrower defaults in repayment, the lender cannot recover the credit from him. Thus a high rate of interest is charged.
Any person who owns a business can apply for this credit. He is required to be over 18years of age. He must have an active current account and a credit card.
