Knowing what commercial loan lenders look for when considering your application for a commercial loan can give you an edge in achieving success in this financial endeavor. Most lending institutions require a veritable mountain of paperwork to determine your eligibility for funding. Here are some of the most important factors that could affect whether or not you would obtain approval for a commercial loan.

Your Business Plan

Many commercial loan lenders look at your overall business plan and marketing strategy before taking a risk and lending money to your company. By including plenty of details, you can make the most positive impression on lenders so that you can potentially acquire the cash you need to expand or grow your business.

Your Business Plan

Many commercial loan lenders look at your overall business plan and marketing strategy before taking a risk and lending money to your company. By including plenty of details, you can make the most positive impression on lenders so that you can potentially acquire the cash you need to expand or grow your business.

Length of Time in Business

Another factor commercial loan lenders will usually consider when determining your eligibility for a loan is the length of time your company has been in operation. Companies with short track records are deemed to be a much higher risk than businesses that have been operating for several years. If your business has only been in operation for a relatively short duration, you may be asked to pay much higher interest rates for the same level of credit. In some cases, you may even be denied outright for a loan.

Cash on Hand

Maintaining adequate operating capital is essential to make the best possible impression on commercial lending institutions. Money in the bank and cash that can easily be extracted from assets owned by your company can be used to demonstrate your financial responsibility and the ability of your business to continue its operations for the foreseeable future.

Credit Score

Your corporate credit history will often play a significant role in the amount of credit for which you can qualify and the interest rates you will be offered for your loan. Keeping your personal credit separate from corporate credit can provide added protection for both entities. By building a solid credit score for your company, you can qualify for more favorable terms and larger loans in the commercial lending marketplace.

Collateral

Large-scale commercial loans are typically secured by one or more items of property that the lending institution can claim if the loan is not repaid in a timely manner. Collateral can consist of any item of value. In most cases, real estate holdings are used to collateralize larger commercial loans. Heavy equipment can also serve as collateral for your company, especially if it will be used in your everyday operations.

You have a number of choices in the commercial lending marketplace. By looking carefully at your options and choosing the most financially beneficial loan for your needs, you can enjoy lower overhead costs that can make a major difference in your profitability and that can help you achieve the highest degree of success in your chosen industry.

If interested in obtaining a commercial loan from an alternative lender in the state of Arizona, California, Idaho, Nevada, Oregon or Washington, contact ReProp Financial where we fund loans direct!