Mind of Money

December 3, 2017 at 1:00 am

What to Keep in Mind When Looking for Commercial Loans

Mortgage and Loan keys on a keyboardCommercial loans are an ideal source of funds to realize the dream of owning or expanding a business. However, you may fail to get funding that is suited for your business if you fail to look at the following points below.

Have the records and plans in place

The lenders want to be sure that their loans will be paid back. They need to see the financial records of your business, your projections, and the activities for which you are seeking a loan, according to ARF Financial, whether its a funding for a restaurant or a small boutique shop. Have a plan, prepare the records, documents, and projections to show that you mean business.

Put some money down

If you would like to buy some equipment or property, you should put a down payment before asking for the loan. Lenders would be more eager to loan you money if you share the risk too. Many of them will not finance your asset for more than 75 percent.

Do market research

Do not close a deal with the first commercial lender you come across. Look around for other offers. Compare the cost of the loan and other terms before settling on a particular lending company.

Negotiate a deal with the lender

Most of the lenders are open for negotiation. See how you can add some icing to the deal and make the lender lower the rates. For example, if you need restaurant funding and your restaurant has some cash flow, you can be banking with the financial institution in return for a better deal.

Borrow what you can repay

Choose a loan that is reasonable for your business. Otherwise, the loan may put you under pressure to seek further funding, cause cash flow problems or even have some of the property taken away by the lender.

If you’ve been planning to expand or re-organize your business, a commercial loan can help you to start your plans immediately. However, keep in mind the pointers above to get the funding that will help your business.