Are you thinking of starting up a revenue-earning endeavor but don’t know where to begin in your search? Looking for prospects that might be economically adequate for your location where there is an untapped market for potential profit? Acquaint yourself first with the different types of commercial business loans. Ticking this first step off your list will allow you to become more familiar with the right type of loan that best fits your financial and economic goals.
Short Term Loans
Accounts Receivable Loan
Yes, you have money but they’re all in checks. The problem is, you need your money immediately. Non-cashable income can be turned to fast cash via an accounts receivable loan. This type of loan lets many business owners keep their operations running while waiting for customer payments. The lender gets paid by getting a portion for loan charges from the incoming income.
Line of Credit
A line of credit allows borrowers access to cash whenever they need it. They are given a credit limit and they can then tap into that reserve multiple times. The borrower is only charged interest on the amount of money used, a convenient feature that many businessmen and women find very useful.
Long Term Loans
Commercial Fishing Loan
A commercial fishing loan, as the name goes, provides financing for all fishing-related activities including the vessel, the gear, or any necessary equipment to purchase Individual Fishing Quotas (IFQs). The business is seasonal in nature and the loan is therefore accordingly structured to cater to that specificity. This is a good avenue for business if you are located in coastal areas or places with rich aquatic diversity.
Ideal for making major renovations or building an all-new property, construction loans are designed to fund building manufacture, rentals, industrial facilities, etc. You can strategically include the purchase of the lot in the construction loan. The property that is being built itself as well as the materials for the construction are what would serve as collateral.
Equipment and Vehicle Loans
These types of loans lend money to borrowers for the purpose of purchasing machinery, equipment, cars, computers and valuable industrial equipment, among others. How you repay and in what terms will be dependent on the aspects of what has been purchased, which is used as a collateral.
Real Estate Loans
This type of commercial business loan covers financing for the purpose of purchasing, refinancing, or even constructing real estate property. It can either be owner-occupied or income-producing and the property built, purchased, or refinanced is what is used as collateral.
Now that you are familiar with some of the most common commercial business options in financing, you can conduct market studies to test business viability in your area of interest. Success isn’t just in the possibility. It requires effort, capital, not to mention a lot of planning to be able to make any business successful.