Business Loans

Revolving Lines of Credit

A borrower is given a credit limit and can borrow up to that amount, repay it, and borrow again. Revolving credit accounts don’t have a set payment amount, but there is usually a minimum payment. Revolving credit is often used for smaller purchases or for borrowers who want access to credit whenever they need it.

Working Capital Loans

A working capital loan is a short-term business loan that helps a company pay for its daily operations. The term “working capital” refers to the money a business spends on short-term expenses, such as payroll, inventory, and utilities.

Construction Loans

A commercial construction loan is a short-term loan designed for construction companies, developers, or builders to finance the construction or renovation of a commercial building.
Other terms and requirements for commercial construction loans include:

Down Payment: A down payment or equity injection of anywhere from 20% to 40% is typical and may be required depending on the type of construction that is being built.
Interest rate: Interest rates can be variable or fixed and could be higher due to the increased risk that comes with a construction loan.
Amortization period: This can be as short as 6 months or as long as 36 months depending on the complexity of the project.
Loan-to-value ratio: Lenders consider these financial ratios when evaluating commercial loans.
Financial requirements: Lenders will consider the financial strength of the owners and guarantors, the business’s credit history, and other factors.

Equipment Loans

Equipment loans are a type of financing that allows businesses to purchase equipment for their operations. The equipment serves as collateral for the loan, and the business repays the loan over time, usually with interest. Equipment loans can be used to buy, repair, upgrade, or replace equipment for a variety of purposes, including:
Office furniture, Computers, Vehicles, Medical equipment, Farm machinery, Construction equipment, and Point-of-sale systems

Term Loans

A term loan is a lump sum of money borrowed from a financial institution that is repaid in regular installments over a set period of time. The borrower agrees to pay a fixed amount of money, plus interest, over the term of the loan. Term loans are commonly used by businesses to increase capital and make investments.

SBA 504 Loans

A 504 loan is a long-term, fixed-rate loan from the U.S. Small Business Administration (SBA) that helps small businesses purchase or upgrade major assets:

Real estate
Equipment
Machinery
Furniture or fixtures

SBA 504 loans are designed to promote job creation and business growth. They are backed by the SBA and funded by Certified Development Companies (CDCs) and third-party lenders.
Here are some features of SBA 504 loans:

Loan amounts: The maximum loan amount is $5.5 million.
Interest rates: Interest rates are fixed for the term of the loan, which can be 10, 20, or 25 years.
Down payments: Borrowers typically need to have at least 10% equity.
Fees: The maximum fee is 2.65% of the loan’s value, but these costs are included in the loan amount.
Refinancing: 504 loans can be used to refinance debt for purchases made with the loan.
Special purpose properties: 504 loans can be used for special purpose properties, such as amusement parks, cemeteries, and hospitals.

SBA 504 loans are often used in conjunction with a bank loan to finance up to 90% of a project’s total costs.

Commercial Real Estate Loans

The term of a commercial loan typically range up to five years (or less), and the amortization period is often longer than the term of the loan.

Commercial Owner Occupied

The typical loan term for an owner-occupied commercial real estate loan is 5–years, but amortization periods can be longer than the loan term.

Other terms and requirements for owner-occupied commercial real estate loans include:

Down payment: A down payment of 20–30% is typical. The SBA 504 Program allows for a down payment of 10%.
Interest rate: Interest rates are rarely fixed for more than 5 years.
Occupancy: The business usually needs to use at least 30–50% of the property.
Financial requirements: Lenders will consider the financial strength of the owners and guarantors, the business’s credit history, and other factors.
Collateral: Lenders consider the nature of the collateral, such as the property being purchased.

Examples of owner-occupied commercial real estate can include office buildings, retail stores, medical offices, industrial buildings, and more.

Commercial Non-Owner Occupied

The typical loan term for non-owner-occupied commercial real estate loans is 5–years, but amortization periods can be longer than the loan term.