Commercial loans are a type of financing designed to fund business activities and provide loans for the purchase and/or construction of commercial real estate. As these loans are not intended for personal use, applicants must prove both reliability and feasibility in order to qualify.

Below, we have provided answers to some of the common questions asked by commercial loan seekers. While many of these may appear to be common knowledge, they still remain common stumbling blocks for today�s applicants. In an effort to more accurately clarify lending misconceptions, we have contrasted the common erroneous beliefs with factual industry data.

Do I Need Business Counseling Before Applying? Is It Costly?

Business counseling is not a prerequisite for a loan approval. However, most of today’s lenders provide counseling services free-of-charge. While not required, we recommend speaking with a counselor beforehand to analyze your financial position. By providing your business information in an organized fashion, you and the lender can discover a solution that will meet your needs.

Can I Get Cheaper Rates If My Business Is Small?

Contrary to popular belief, there are essentially no differences or advantages to having a small business over a large one. In fact, interest rates are negotiable. The lower rates big companies experience is a result of greater negotiating skills and industry power, rather than the size of the firm alone. Other terms, such as repayment schedules, co-signing and loan security may reduce the rates small businesses experience.

Is It Harder To Get Small Amount Commercial Loans?

No. Moreover, the opposite is true. By spreading the money across several borrowers, the individual risk of default is reduced. For example, it is harder for 100 borrowers owing $50,000/each to default at the same time, than for a single borrower owing $5,000,000. While the overall amount is the same, the risk is significantly smaller on smaller loans. As a result, it is substantially easier to gain approval for small loan amounts as lenders are eager to fund them.

There Are Not Many Commercial Loans Out There. Are They?

Absolutely! There are many kinds of commercial loans available, including:

  • Guaranteed Loans
  • Loans For Veterans
  • Assistance Loans
  • Importing/Exporting
  • Small Business Loans
  • Construction Loans
  • And More!

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