Types of Loans
Commercial Term Loans
A loan for equipment, real estate and working capital that's paid off like a mortgage for between one year and ten years. Term loans are your basic vanilla commercial loan. They typically carry fixed interest rates, and monthly or quarterly repayment schedules and include a set maturity date.
Business Line of Credit
A business line of credit is a type of small-business loan that provides flexibility that a regular business loan doesn't. With a business line of credit, you can borrow up to a certain limit — say, $100,000 — and pay interest only on the portion of money that you borrow..
Asset Based Loans
Asset-based financing is a way for companies to use property, inventory, and accounts receivable as collateral to obtain a loan. Asset-based finance is a field solely used by businesses not by individuals seeking personal loans. These types of loans may be more flexible than traditional commercial loans.
Merchant Cash Advance
A merchant cash advance (MCA) was originally structured as a lump sum payment to a business in exchange for an agreed-upon percentage of future credit card and/or debit card sales. ... The term "merchant cash advance" may be used to describe purchases of future credit card sales receivables or short-term business loans.
Commercial bridge loans are used by developers, real estate investors and other commercial borrowers in several different circumstances, including to: Refinance (pay off) an expiring term balloon loan to position the property for a permanent loan with terms more favorable to the borrower.
Equipment financing is the use of a loan or lease to purchase or borrow hard assets for your business. This type of financing might be used to purchase or borrow any physical asset, such as a restaurant oven or a company car. ... If you default on your loan or lease, the lender can repossess the asset.
The US Small Business Administration 504 Loan or Certified Development Company program is designed to provide financing for the purchase of fixed assets, which usually means real estate, buildings and machinery, at below market rates. As part of its mission to promote the development of businesses, the SBA offers a number of different loan programs tailored to specific capital needs of growing businesses.
Commercial construction loans are used to cover the upfront costs associated with the construction of bigger commercial building projects, as well as the purchase or renovation of existing commercial property. Generally, interest rates range from 4% to 12%.
Invoice financing is a way for businesses to borrow money against the amounts due from customers. Invoice financing helps businesses improve cash flow, pay employees and suppliers, and reinvest in operations and growth earlier than they could if they had to wait until their customers paid their balances in full.