Commercial Lending for New Business Owners

People start their own businesses in hopes of making money. It doesn’t take long for young entrepreneurs to realize that you have to spend a great deal of money in order to even sniff the cash you’re hoping to bring in. Unless your own pockets are extraordinarily deep, commercial lending will likely be necessary in order to cover the costs associated with owning a company. The better you understand how business loans work, the more likely you are to find the right source of financing.

Qualifying for Commercial Funding

Small business loans can be extremely competitive, for better and worse. It’s unfortunate that so many startups get turned down for these loans, but it’s important that the lending companies not offer funding to any old person looking to borrow. If you want to qualify for small business financing, your best course of action is to over prepare. Making sure you have a thorough application is the first step towards qualifying over other hopeful loan seekers. Have your business credit, personal credit and every relevant business statement ready to go so all of the loan officer’s questions can be answered.

Commercial Lending Loan Terms

The main benefit of commercial lending is receiving terms that make sense for your business. Whereas a standard bank loan might not offer the right amount of capital or process too slowly, your company should be able to get the money it needs with a repayment period that works for your business model. Naturally, you don’t just get money and excellent terms because you have a business license. Your company has to prove its ability to generate revenue and likely put some sort of guarantee forth to incentivize the lender. If you have accounts receivable, assets and steady cash flow, you can expect reasonable terms.


Collateral can be the most frightening and yet best way to secure a commercial loan with a decent interest rate. It’s never ideal to risk ownership of something your business needs to operate. On the other hand, if you’re confident that how you use the borrowed money will immediately create income, the collateral won’t ever come in to play. If all goes as it should, you can get a substantial loan with solid terms simply by owning equipment you needed anyway.

Commercial lending is quite a bit different than more standard loans, though the core principals are essentially the same. If you can present a good credit score and make the lender feel like you’re a responsible borrower, you should be able to access the cash you need.