10 Types of commercial loans

Please contact us for any commercial loan.

Commercial loans are financial products designed to meet the diverse needs of businesses and real estate investors. Here are ten common types of commercial loans:

1. Term Loans

• Purpose: For purchasing equipment, expanding operations, or funding long-term projects.

• Key Features: Fixed repayment schedule over 1–10 years, with a fixed or variable interest rate.

• Best For: Established businesses with steady cash flow.

2. SBA Loans

• Purpose: Small Business Administration-backed loans for small and medium-sized businesses.

• Types:

  • 7(a) Loan Program: General business purposes.

  • 504 Loan Program: Financing real estate or large equipment.

• Best For: Small businesses needing favorable terms and lower interest rates.

3. Commercial Real Estate Loans

• Purpose: To purchase, develop, or refinance commercial property.

• Types:

  • Owner-occupied loans

  • Investor property loans

• Best For: Business owners or investors looking to acquire or refinance commercial property.

4. Equipment Financing

• Purpose: Purchase or lease essential machinery and equipment.

• Key Features: Equipment serves as collateral, and loan terms often match the equipment’s useful life.

• Best For: Businesses needing costly equipment upgrades or purchases.

5. Lines of Credit

• Purpose: Flexible access to funds for working capital or short-term needs.

• Key Features: Revolving credit limit with interest charged only on borrowed amounts.

• Best For: Businesses managing fluctuating cash flow.

6. Bridge Loans

• Purpose: Short-term financing for immediate needs, often for property purchases or interim funding.

• Key Features: High-interest rates with short repayment terms (6–36 months).

• Best For: Investors or businesses awaiting long-term financing or asset sales.

7. Construction Loans

• Purpose: Finance the construction or renovation of commercial buildings.

• Key Features: Interest-only payments during construction, transitioning to a long-term loan upon project completion.

• Best For: Developers and businesses building or upgrading properties.

8. Business Acquisition Loans

• Purpose: To acquire an existing business or franchise.

• Key Features: Based on the value and potential of the business being acquired.

• Best For: Entrepreneurs buying a new or established business.

9. Accounts Receivable Financing (Factoring)

• Purpose: Convert unpaid invoices into immediate cash.

• Key Features: The lender advances a percentage of the invoice value, with fees deducted upon customer payment.

• Best For: Businesses with slow-paying customers needing immediate cash flow.

10. Merchant Cash Advances (MCAs)

• Purpose: Advance cash based on future credit card sales or revenues.

• Key Features: Repaid as a percentage of daily sales, with higher fees than traditional loans.

• Best For: Businesses with strong sales but limited access to traditional credit.

Each type of commercial loan has specific uses, repayment structures, and eligibility requirements, making it essential to choose the right product for your business needs.