Commercial loans are borrowed funds that assist businesses finance aspects of business operations that require immediate capital. These loans may be acquired from a number of sources including commercial banks, other companies, or private lenders, and are in many cases not used to finance large purchases such as buildings, other companies, or land real estate. However, asset backed commercial loans are used for longer term financing such as in the case of corporate acquisitions, large and expensive equipment and property. Below are some examples of secured commercial loans in a broad sense of the term:
• Secured business line of credit
• Business mortgage
• Corporate asset backed security loans
• Secured debentures
• Short term secured equipment loan
• Acquired asset backed term loans
Secured commercial loans are collateralized with something of value that is owned by the company seeking the loan. This provides the bank more security in the case of loan default, failed forbearance or delinquency. Some examples of assets that may be acceptable collateral by commercial loan lenders are listed below. However, it may be useful to note some lenders may only consider a few types of collateral for the sake of simplicity and lending policy.
Secured commercial loans are collateralized with something of value that is owned by the company seeking the loan. This provides the bank more security in the case of loan default, failed forbearance or delinquency. Some examples of assets that may be acceptable collateral by commercial loan lenders are listed below. However, it may be useful to note some lenders may only consider a few types of collateral for the sake of simplicity and lending policy.
• Inventory
• Accounts receivable
• Liquid assets such as bonds, and equities
• Property, plant or equipment
• Legal settlements
• I.T. applications, patents and property liens
Where to get a commercial secured loan
As mentioned above, lenders of commercial loans include various financial institutions, companies, or private lenders. Depending on the business structure, sought after loan terms and amount, those willing and able to lend can vary. For example, a small commercial bank will be in a less suitable position to finance a large fortune 500 company seeking a short term commercial loan than a larger financial institution. The following link is a sample commercial loan application from regalfinancialbank.com.
To elaborate further, some financial institutions may not take a preference to collateralized lending over other aspects of companies finances such as monthly net income and revenue in relation to cash outflow and liabilities. Different locales, regions and countries may offer different types of commercial loans so it is important to research the loan specifics to match the loan requirements. Below are few examples of U.S. commercial lenders and financial institutions that finance secured commercial loans.
Where to get a commercial secured loan
As mentioned above, lenders of commercial loans include various financial institutions, companies, or private lenders. Depending on the business structure, sought after loan terms and amount, those willing and able to lend can vary. For example, a small commercial bank will be in a less suitable position to finance a large fortune 500 company seeking a short term commercial loan than a larger financial institution. The following link is a sample commercial loan application from regalfinancialbank.com.
To elaborate further, some financial institutions may not take a preference to collateralized lending over other aspects of companies finances such as monthly net income and revenue in relation to cash outflow and liabilities. Different locales, regions and countries may offer different types of commercial loans so it is important to research the loan specifics to match the loan requirements. Below are few examples of U.S. commercial lenders and financial institutions that finance secured commercial loans.
• CIT
• Wachovia Corp.
What to look for in a commercial secured loan
Secured commercial loans may be simple or complex depending on the needs of the company, size of the loan and terms of the loan itself. In some cases law firms may facilitate the legal documentation of secured commercial loan transaction whereas in other cases the loan may follow a more standard agreement and terms. Sometimes than can impact the potential benefits of a commercial loan are listed as follows.
What to look for in a commercial secured loan
Secured commercial loans may be simple or complex depending on the needs of the company, size of the loan and terms of the loan itself. In some cases law firms may facilitate the legal documentation of secured commercial loan transaction whereas in other cases the loan may follow a more standard agreement and terms. Sometimes than can impact the potential benefits of a commercial loan are listed as follows.
• Competitive interest rate
• Length of loan
• Fees, surcharges and/or additional costs
• Interest and/or penalties for default indemnification
• Percent and/or type of assets used as collateral
• Down-payment and insurance if any
Other things to look for involve the commercial loan lender itself. The lender's financial solvency, location(s), variety of loan products, ability to service a loan and experience in the industry can all be relevant to a obtaining a secured financial loan. If the loan is complicated and difficult to obtain, this may be an indicator of the lenders capacity and willingness to lend.
Summary
Secured commercial loans are asset backed loans used to finance business activities or purchases needed in short term operations. However, in some cases long-term asset backed commercial loans are financed, a common example of which would be a commercial mortgage. Specific financial institutions that specialize in commercial loans, corporate lenders and private lenders may offer commercial financing.
The type, terms and availability of commercial loans can be an indicator of how likely and easy it will be to find financing for such a loan. The more complex, large and uncommon the loan, the more likely it may be the loan will have to be customized and facilitated through legal and commercial negotiation. With all secured commercial loans, the terms, charges and details of the loan are important in determining the advantages and competitiveness of the loan.
Other things to look for involve the commercial loan lender itself. The lender's financial solvency, location(s), variety of loan products, ability to service a loan and experience in the industry can all be relevant to a obtaining a secured financial loan. If the loan is complicated and difficult to obtain, this may be an indicator of the lenders capacity and willingness to lend.
Summary
Secured commercial loans are asset backed loans used to finance business activities or purchases needed in short term operations. However, in some cases long-term asset backed commercial loans are financed, a common example of which would be a commercial mortgage. Specific financial institutions that specialize in commercial loans, corporate lenders and private lenders may offer commercial financing.
The type, terms and availability of commercial loans can be an indicator of how likely and easy it will be to find financing for such a loan. The more complex, large and uncommon the loan, the more likely it may be the loan will have to be customized and facilitated through legal and commercial negotiation. With all secured commercial loans, the terms, charges and details of the loan are important in determining the advantages and competitiveness of the loan.
Sources:
1. http://www.businessdictionary.com/definition/commercial-loan.html
2. http://www.gelending.com/Clg/Resources/lendingFAQs.html#Faq8
3. https://www.chase.com/index.jsp?pg_name=ccpmapp/commercial/prod_serv/page/cbc_faqs
4. http://www.fwwlaw.com/showarticle.aspx?Show=291
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