Commercial loans are quite common. Individuals who have decided to start a new business or are looking to expand their existing business or simply need additional supplies or equipment for the business usually apply for a commercial loan.
Are Commercial Loans Easy to Obtain?
In today’s economy, unfortunately any type of loan is going to be difficult, but especially commercial loans. Since the sub-prime mortgage crisis, banks are becoming increasingly weary of giving loans for any reason. For commercial loan borrowers, the process is a bit more complicated than applying for a payday loan, as an example. First of all, it takes longer to be approved for a commercial loan than other types of loans. The lender requires details on every aspect of your income, credit report, and scores as well as any collateral you may have available. Then, your application is reviewed by several individuals and it could take more than a month before you are notified as to the outcome.
How Do I Find a Commercial Loan Lender?
The best recommendation we can make is to talk to your local banker. He or she can guide you through the process. But before you talk to anyone, you need to ensure that you have a business plan (if you are contemplating starting a new business), know your credit score, ensure your three credit reports are up to date and correct, make sure your taxes have been filed and your business accounts are in order, have some form of collateral in case your business fails, and only ask for that which you need money wise. In addition, speak to several lenders to determine the best interest rate available. Remember, the interest rate is based on your credit score so, if need be, pay down your existing debt in order to raise your credit score before applying for a commercial loan.