What is commercial loan ?

A commercial loan is generally classified as a loan that is used for business or investment purposes, and where no residential property is involved.

 Unlike home loans, where the rates and terms tend to be set and inflexible, commercial loans generally have more scope for negotiation, depending on the lender, the purpose of the loan, the perceived risks, and the overall financial position of your business.

 Commercial loans are available both for short term financing or over extended periods of time as required and can be written either as fixed rate or as variable rate loans.

What can a commercial loan be used for?

A commercial loan can be used to purchase a range of different assets to grow your business. This can include building or moving to new or expanded premises, extending your product and stock range, or purchasing new equipment, plant or machinery.

In addition, you can use a commercial loan to pay for the hiring and training of new staff, improving your cash flow, or for meeting the costs of marketing and advertising.

How to apply for a commercial loan?

To apply for a commercial loan, you will generally need to demonstrate a thorough understanding of your business’ current financial position, as well as having a business plan in place to indicate its future direction.

As a starting point, you will need to have prepared a cash flow statement, that includes information such as current income, net profit, expenses and future projections.

You will also need to make clear to potential lenders whether finance is required up front or on a needs basis, as well as any assets that can be offered as security. You should also aim to demonstrate that you have taken into account the costs associated with a commercial loan in your calculations, such as set up and ongoing administrative fees, as well as the interest payments on the loan.

How we can help

Finnciti can provide you with a wide range of commercial loan options, and connect you with specialist lenders who understand your business needs.

Our expert advisers are always on hand to ensure you have all the information and data you need to be able to choose the right commercial loan for your business.

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