Commercial finance involves what’s often called “asset based loans”. The assets of your business are items such as your outstanding account receivables, open purchase orders, inventory, import and export contracts, equipment, reoccurring credit card billings and various hard assets.
Commercial financing types are loans like invoice factoring, purchase order advances, credit card receipt advances, secured working capital credit lines, inventory flooring financing, franchise financing and various letters of credit.
Getting approval for commercial financing typically depends more on your assets than it is about your business. For example, a commercial finance lender will look much harder at the credit worthiness of your client for that invoice receivable than they will at you. For that purchase order you want to finance, a commercial finance loan will require that the company issuing the purchase order has good credit.
If a commercial finance lender is going to approve your business for a secured line of credit, they will want to know that the assets liquidation value is enough to pay back the loan. So, if they have to sell your crane or a backhoe, they want to be sure they can get their money back.
The best way to get a secured business loan is to secure it with a certificate of deposit or CD. With this method, you can borrow money from friends or family, or even use your own savings to secure a loan that will help generate more working capital.
Finding commercial finance lenders is easy. You can use our search feature to track down a lender, or you can learn more about them below:
|Capital Type||Capital Type Definition|
|Account receivable factoring serves as collateral for short-term working capital loans that you can obtain fast and efficiently.|
|Asset Based Loan||Seeking to convert a company assets into working capital. Giving a security in an asset(s) in exchange for cash.|
|Bankruptcy Reorganization Financing||Financing to reorganize in a turnaround. Typically secured by assets: equipment, inventory, A/R, POs, etc.|
|Expansion Financing||Growth has outpaced existing business. Key here is existing demand, not projected.|
|Import and Export||Loans to promote the shipping or receiving of products or materials. Based on existing market, demand or orders.|
|Inventory Loan||A loan typically made as part of a relationship where the lender will also provide retail financing, as well.|
|Purchase Order Financing||Loans on the written order to purchase goods at a stipulated price with an agreed to delivery date. Credit rating of the person ordering is key.|
|Secured Credit Line||A pre-arranged amount of credit based upon existing inventory, A/R and POs.|
|Merchant Account Advance||Up to a $150,000 advance against regular occurring monthly merchant credit receipts.|