9 Types of Commercial Loans Your Business Can Take Advantage of

Many people get business ideas in their heads but don’t follow up on them because they don’t have enough capital to launch an enterprise. However, that’s where borrowing comes in, as a loan can lead to an investment that generates profits. Before you start searching for a “commercial loan near me,” it helps to learn about the following types of commercial loans in Los Angeles.

  1. Commercial Real Estate Loan

    Commercial real estate loans can be used for buying property to lease space or as an investment. This category can be broken down into further loan types, such as a blanket loan designed to purchase several commercial real estate properties.

  2. Business Line of Credit

    Like a credit card, a business line of credit can be used to make any purchases. Your credit score will affect whether or not you are approved for the loan and how much of a credit line you can access. It will also affect your interest rate.

  3. Equipment Financing

    The means of production for most industries is some type of niche-oriented equipment. Business equipment can be expensive, but with an equipment loan, you can pay for it in pieces. The equipment you purchase can be used as collateral for the loan.

  4. Term Loan

    A term loan provides flexibility for the borrower, giving you one to twenty years to pay it off. The loan can be used for almost any business purpose while it may have a fixed or variable interest rate.

  5. Commercial Construction Loans

    Like a mortgage, commercial construction loans are repaid over many years. The money is used for paying a contractor to build a commercial property. Owning a hard asset makes your business more financially secure.

  6. Commercial Auto Loan

    Does your business require a fleet of vehicles? If so, you should pursue a commercial auto loan, which can be used to purchase company vehicles. This loan works well for investing in vans and trucks.

  7. SBA Loan

    Small businesses can apply for a Small Business Administration (SBA) loan. The SBA offers various loan programs, and each one has its own eligibility requirements. The most common loan in this group is an SBA 7(a) loan. It can be used for any business-related expense, including purchasing commercial property. Meanwhile, microloans are designed for start-ups and can run as high as $50,000.

  8. Bridge Loans

    As the name suggests, a bridge loan fills the gap between current and future business needs. Short-term bridge loans have higher interest rates than long-term loans. Bridge loans are commonly used for purchasing commercial real estate or providing a business with immediate cash flow.

  9. Inventory Financing

    You can purchase inventory upfront with this type of loan, then use your inventory as collateral. The lender provides access to the cash you need to show a significant number of invoices to fill.

Securing funding for your business puts you on the path to financial success. If you need help finding a commercial real estate loan, contact our experts at Fidelity Mortgage Lenders today. We provide funding for a variety of commercial real estate properties.

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