Top 10 Commercial loan types.

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1. Term Loans

• Purpose: For long-term investments such as business expansion, purchasing equipment, or refinancing existing debt.

• Repayment: Fixed schedule over a period, usually 1 to 25 years.

• Interest Rates: Fixed or variable.

2. SBA Loans (Small Business Administration Loans)

• Purpose: For small businesses seeking government-backed loans, often used for working capital, expansion, or refinancing.

• Key Programs:

  • SBA 7(a) Loan: General purposes.

  • SBA 504 Loan: For real estate or equipment.

  • SBA Microloans: Small-scale loans up to $50,000.

3. Business Line of Credit

• Purpose: Flexible, revolving credit that businesses can draw from as needed for short-term cash flow or emergency needs.

• Repayment: Only pay interest on the amount borrowed.

• Reusability: Once repaid, credit is available again.

4. Commercial Real Estate Loans

• Purpose: For purchasing or refinancing real estate properties like offices, warehouses, or retail spaces.

• Terms: Typically 10 to 30 years, with fixed or variable interest rates.

5. Equipment Financing

• Purpose: To finance the purchase of machinery, vehicles, or other equipment.

• Collateral: The equipment itself acts as collateral.

• Repayment: Fixed payments over the lifespan of the equipment.

6. Invoice Financing (Factoring)

• Purpose: To improve cash flow by borrowing against outstanding invoices.

• Structure: The lender advances a percentage of the invoice amount, and the balance is paid when the invoices are settled.

7. Merchant Cash Advance

• Purpose: Quick funding for businesses based on future credit card sales.

• Repayment: A percentage of daily or weekly credit card receipts.

• Rates: Higher interest rates compared to traditional loans.

8. Working Capital Loans

• Purpose: Short-term loans used for covering day-to-day operations, payroll, inventory, or seasonal needs.

• Term: Typically repaid within 1 to 2 years.

9. Bridge Loans

• Purpose: Short-term financing used to bridge the gap between current needs and long-term financing, often for real estate or business expansion.

• Repayment: Higher interest rates with terms ranging from 6 months to 3 years.

10. Franchise Loans

• Purpose: Financing for purchasing a franchise or expanding an existing franchise.

• Uses: Can cover costs such as equipment, real estate, or the franchise fee.

These loans vary based on their purpose, repayment terms, and interest rates, allowing businesses to choose the one that best fits their needs.

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