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Home Commercial Loan Basics
Commercial Loan Basic Concepts
Understanding Commercial Loans PDF Print E-mail

 

Understanding commercial loansCommercial loans are used to fund businesses and to purchase or finance the construction of a property for a commercial business. They cannot be used for personal reasons. A commercial loan uses commercial property, or real estate, as collateral to secure the loan, often referred to as a mortgage. The commercial loan collateral is sometimes supplemented by a general obligation of the borrower or with a personal guarantee from the business owner. Commercial loans are also called business loans, or commercial mortgages. They can be used to purchase the business premises, start up a new company, purchase inventory or new equipment, fund new construction, perform renovations and repairs, buy a commercial building for new or existing business, expand or extend an existing business, refinance an existing mortgage, cover emergency expenses, provide investment capital, etc.

 

You can apply for a commercial loan if you have a new business or an established business that needs money, and if you have a legal business entity such as a sole proprietorship, partnership, LLC, corporation, or nonprofit organization. The business or the business project needs to qualify for the commercial loan and verify that it can pay pack the loan with interest in the agreed upon time period. Commercial loans are usually obtained from conventional financial institutions, such as banks, credit unions, and insurance companies; commercial banks provide the majority of business loans.

Last Updated on Wednesday, 11 September 2013 16:37
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Logistics of Commercial Loans PDF Print E-mail

Evaluate business needsYou should carefully consider both your need for a commercial loan and your ability to obtain one before seeking financial assistance. It will take considerable effort to gather all the data you need and fill out the required forms and applications. If you have any questions concerning this decision you can contact one of our representatives and obtain their experienced help, or send us an email with any questions you may have.

 

The first step is to thoroughly assess your current financial needs. Determine why you need the money and how you will spend it, how much you need, and when you need it. You must put together a good plan for using the loan proceeds, and a schedule for completing the planned project. You may have to perform a detailed analysis and obtain professional estimates to determine how much money you need. There will be other expenses to consider,including loan processing fees, closing costs, property survey, property appraisal, environmental report(s), and legal fees.

Last Updated on Wednesday, 11 September 2013 16:35
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