Do you own and operate a small business, and interested in broadening your company to the next level by renovating your current space or moving to a new location, but perhaps need some extra cash to help you reach your goal? Commercial loans can provide financial assistance to business owners to help make improvements to enhance their business. If you are a business owner in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, and have questions about upgrading your business, Foundation Mortgage is here to help.
How Do Commercial Loans Work?
A commercial loan is a type of funding that allocates larger sums of money to a borrower and is typically given out to medium to larger size companies; commercial loans are intended specifically for business owners rather than for an individual. Commercial loans are primarily used for purchasing property and real estate for a business, inventory, operating equipment, payroll, etc. There are several different types of commercial loans available, depending on the needs of a business, including: shorter term loans, term loans, lines of credit, equipment loans, commercial real estate loans, etc. A commercial loan can be either secured, meaning that a loan is backed by collateral, (typically property or inventory), or they can be unsecured, in which a loan is not backed by collateral, but rather based on a borrower’s credit.
What Are the Benefits of Obtaining a Commercial Loan?
Commercial loans can offer many advantages, such as providing your business with supplemental funding quickly. The repayment schedule for commercial loans are usually spread out over a longer period of time, making it more manageable to make the required mortgage payments, and some lenders are willing to be more flexible with payment schedules. Another significant benefit to a commercial loan is that you are able to remain the sole owner of your business while borrowing a substantial amount of money.
Commercial Loan Eligibility Requirements
In order to qualify for a commercial loan, some typical eligibility requirements include:
- A business usually needs some form of collateral, for example equipment or property, to exchange in the event a borrower is unable to make loan payments.
- A borrower must provide documentation of steady income, current assets, and a history of the business.
- A borrower will be required to pay interest to the lender, but it is important to note that this paid interest will be tax deductible.
- A plan that details how the money will be utilized for the business must be provided.
If you are interested in obtaining a loan to help make improvements to your business in Knoxville, Maryville, Lenoir City, Oak Ridge, or Gatlinburg, Tennessee, Foundation Mortgage can work closely with you to help meet your goals. Contact us today for a consultation.