Commercial lending
Commercial lending
Either for starting up or growing up, your small business somehow needs proper financing to leverage your business growth.

One of my biggest mistakes as an entrepreneur and business owner is NOT to look for business financing when my businesses need them. Of course, I don’t take any loans to support my ailing business.

Why? Let us clarify a thing or two: If your businesses are in trouble, don’t take any financing programs – By all means, business financing is not for supporting your ailing business. Instead, commercial finance opportunities are meant to help your business break growth barrier and thrive.

Here is what you need to do before taking any commercial financing: You need to analyse your business first, fix things up second, and seek for proper financing third.

When you are ready, let’s read on :)

The purposes of commercial finance

According to Wikipedia, commercial finance is the function of offering loans to businesses. Commercial financing is generally offered by a bank or other lender… and the loans are either secured by business assets or alternatively can be unsecured, where the lender relies of the cash flows of the business to repay the facility.

For small business owners, commercial financing includes: Business startup loans, business lines of credit, business growth loans and hard money loans.

Obviously, commercial finance is purposed to help small business owners to leverage their business need of capital – This occurs in start up phase, in business growth campaign, in increasing asset liquidity, in securing business deal, and in any other capital-intensive business activities.

Where to look for commercial financing possibilities

Again, as I often suggest you before, you should search the Internet for commercial financing.

First, you should look for info on commercial finance, including the requirements on your side, which might include the availability of collateral for secured loans purpose.

Second, you need to look for a list of commercial lenders – mainly banks and local lenders – ready to work with you in providing capital. There are many commercial lending directories on the web, but I recommend you to look for the trusted ones, such as CFinance.com. If you are living in the US, the Small Business Administration (SBA.gov) always be the source for such lending – The SBA may provide either financing or insure a lender who takes a risk on a smaller company to provide commercial finance.

Some words of wisdom on commercial financing

From my experience, I can offer you the following tips:

  • Always do your homework: Do your due diligence – Prepare the right documents to ace your commercial financing proposal. As important, do feasibility studies on your business – Measure your capability in paying back the loan principals and interests. Loans should help you grow and do more business, not drown yours in debts.
  • Whenever possible, avoid unsecured loans as they are volatile and can easily drag you into debts if not treated right.
  • Have the right mindset: As I have already mentioned early in this article, you should identify why you want to take commercial loans – Is it to help you leverage your business’ growth or to remedy your cash flow problems? The former is more desirable than the latter, as the latter will always increase your business’ risk of going bankrupt due to your inability to pay back debts later on.
  • Ivan Widjaya
    Treat commercial financing the right way, and it will treat your business right.
    Image by svilen001.