Looking to purchase inventory, expand or build your business? Commercial loans are a great way to help finance your business ventures.

Commercial loans are considered any loan that will be used for income producing activities and can aid in acquisition and development of property, the purchase of new equipment or can help to start up a new business. Because loans are vital to the growth of a business, it is important that there is a strong, working relationship between the lending institution and the company.

Much like personal home loans, there are several options when considering a commercial loan. Commercial loans come in many of the same forms as home mortgages with options ranging from a fixed or variable rate to short or long term loans. Interest rates will vary depending on the amount and length of the loan as well as a company’s credit history. There is often a higher risk involved in commercial loans and therefore interest rates are often slightly higher and repayment periods are typically shorter than those associated with home loans.

One of the most common commercial loans is a revolving credit line which allows a company to get cash quickly. A revolving credit line functions in a similar manner to a home equity line of credit: a company can pull the necessary cash out of a fixed loan amount and only pay interest based on what they use. Credit lines are ideal for short-term cash flows or seasonal fluctuations to allow a company to continue to grow. Most credit lines involve a variable interest rate, and therefore monthly payments may vary.

It is important to look at how the commercial loan will affect the future growth and cash flow of your business. Speak with a loan advisor to ensure that you are applying for the type of commercial loan that best fits your business’ needs.