Many commercial real estate businesses often find themselves in difficult financial situations when starting their businesses and this comes with limited options for raising the necessary funds. Studies show that over a quarter of small businesses are unable to expand due to financial constraints. Commercial business loans can be a viable solution for these businesses, allowing them to finance operations such as opening new locations, hiring new employees, purchasing equipment, and investing in new inventory. However, it is important to consider whether a commercial business loan is the right choice for your business.

Advantages of commercial real estate loans include:

Increase your financial liquidity A large majority of small businesses in the U.S. fail due to cash flow issues, which can be caused by either mismanagement of funds or seasonal operations. For example, if you own a business that experiences a lot of seasonal fluctuations, it can be difficult to keep it running and expanding throughout the year. A commercial loan can help you finance your business when your cash flow is low, allowing you to continue to grow.

Obtaining a large sum of money While equity markets and venture capital can provide businesses with a substantial amount of capital, many small businesses are unable to take advantage of these options for various reasons. Fortunately, commercial business loans are a more accessible option for businesses to acquire a significant amount of funding.

Extended repayment terms Commercial loans typically have repayment periods that range from 3 to 10 years, making it easier to pay back the loan over a longer period of time.

Retaining control of the business Selling shares in the equity market is one of the most costeffective ways to raise funds, but it can also lead to a loss of control of the business. Commercial business loans provide an alternative source of funding, allowing businesses to keep ownership of their company while repaying the loan.

Low-interest rates Most lenders offer competitive rates on secured commercial business loans, which can help you save money on repayment. Unsecured loans may also be available, but the lender may require a personal guarantee before issuing the loan.

Lengthy application process Before approving your loan application, the lender will need to verify that your business is capable of repaying the loan. This means youll likely need to provide key business documents, including tax returns, accounts receivable, accounts payable, and financial statements. You may also need to provide your credit history and give a presentation outlining your business goals.

Strict qualifications Submitting the necessary paperwork is one step, but meeting the lender‘s standards is another. Companies with strong business credit have the best chance of obtaining a commercial business loan. The lender may also examine your individual finances, such as unpaid debts, credit rating, and yearly income. Any issues in your personal finances can make you ineligible for financing.

Tough consequences of defaulting The potential repercussions of not meeting your loan obligations can be severe. For example, if you take out a secured loan with your home as collateral, you could lose your property if you are unable to make the payments. Additionally, a default on the loan could have a negative impact on your business credit score, making it difficult to obtain financing in the future.

Strict repayment terms Longterm commercial loans come with fixed repayment plans that require regular monthly payments for the entire loan period. Even if your business is facing a downturn due to a lack of customers or other disruptions, the lender will still expect you to make your payments on time.


If you believe your business is ready to start, please get in touch with Filthy Rich Idea at 888-369-4332 to find out more info or fill out our online application today for a business loan. We got your back!