subject: Commercial Lending - Options To Consider [print this page] Commercial lending is a complex process that is very far removed from residential or personal lending.
It's basically loans that are written to businesses for a variety of reasons. They usually revolve around expansion or sometimes securing property for a business.
Usually a bank or finance company even sometimes private investors are willing to lend a business some money to get the business where it needs to be. It is different from personal or residential lending in many ways.
It usually has minimum limits, it would be very unusual for a commercial entity to walk into a lenders office and ask for a five thousand dollar loan. Small loans are usually handled through a line of credit. It is especially for property typically starts at the two hundred fifty thousand mark. It just makes sense to the banks and other lenders to have a minimum.
The lending process is also different from personal or residential loans. With this type of lending there are a lot more documentation that is required. There may be requests for three previous years worth of financials and taxes and a host of other information that would never be requested to write a personal or residential loan.
There are a few options. There are nontraditional banks that do it. There are traditional banks that almost always do it. There are funding agents that do it and there are private investors that offer it. Each entity will have different requirement and different rate schedules but they will all have plenty of forms and paper work to fill out and provide.
It is the only way that some businesses can grow. It is offered from many different avenues, it is a difficult process to navigate but is well worth it in the end for the business owners.
Commercial lending is almost always utilized to expand or to secure some property for business.
by: Alex Brown.
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