Commercial Capital Loans Explained in Detail

Commercial capital loans are a type of financing that allows businesses to borrow money to cover operational costs, such as inventory, equipment, and employee salaries.

These loans are typically offered by banks, credit unions, and other financial institutions, and can be secured or unsecured, depending on the lender's requirements.

Secured commercial capital loans require collateral, such as property or assets, to guarantee repayment. Unsecured loans, on the other hand, rely solely on the borrower's creditworthiness to secure the loan.

Businesses can use commercial capital loans for various purposes, including expanding operations, hiring new employees, or purchasing new equipment.

Recommended read: Small Business Lines of Credit Unsecured

Commercial capital loans can be structured in various ways to meet the unique needs of your business. A commercial loan can be a term loan or a line of credit, providing a lump sum of capital that you repay over time or access to a set amount of funds as needed.

Traditional lenders are more likely to require collateral for commercial loans, but not all lenders do. This means you may need to secure your loan with an asset, such as property or equipment, to qualify.

There are several types of commercial loans available, each designed for specific purposes. Equipment financing can help you purchase specialized equipment for your business, while commercial real estate loans can be used to buy or renovate property.

Commercial auto loans are used to buy vehicles for your business, and commercial construction loans can finance new building projects or major renovations. A commercial bridge loan can provide short-term financing to take advantage of an immediate opportunity, covering the gap until you can find a long-term loan option.

Here are some common types of commercial loans, summarized below:

Keep in mind that not all commercial loans require collateral, and some lenders may have more flexible requirements than others.

The loan process for commercial capital loans is relatively straightforward. You can expect it to take anywhere from a few days to several weeks to complete, depending on the lender and the complexity of your loan application.

Expand your knowledge: Does Regulation B Apply to Commercial Loans

First, you'll need to submit your loan application, which typically includes providing financial statements, tax returns, and other business documents. This is usually done online or through a loan broker.

The lender will then review your application and may request additional information or clarification on certain points. This is a normal part of the process and shouldn't be cause for concern.

Once the lender has all the necessary information, they'll make a decision on your loan application. If approved, you'll receive a loan offer outlining the terms and conditions of the loan, including the interest rate, repayment schedule, and any fees associated with the loan.

Alloy Commercial Capital has been selected by the Ohio Development Services Agency to offer Ohio Regional 166 Loans throughout all of Ohio.

To get started, you'll need to contribute at least 10% of the project cost in cash.

Alloy Commercial Capital provides up to 40% of the project cost up to a $1,000,000 loan.

You can reach out to one of their expert loan officers at 513-631-8292 for more information.

Bridge loans are a type of short-term financing available to businesses needing capital, often used to finance immediate opportunities, particularly in real estate.

Commercial bridge loans are used to "bridge the gap" between a business' immediate funding need and a longer-term financing solution.

A bridge loan is a short-term loan, typically between 6-36 months, that uses hard assets like real estate or equipment as collateral.

These loans often close much faster than other types of loans, making them ideal for businesses with urgent funding needs.

Here are some common reasons businesses use bridge loans:

Commercial loans are typically structured as business term loans or lines of credit. You can choose between the two options depending on your business needs.

A term loan provides a lump sum of capital that you repay with interest over a specific period of time. This type of loan can be a good option if you have a clear plan for how you'll use the funds.

With a commercial line of credit, you have access to a set amount of funds that you can draw from as needed. You only pay interest on the money you use, making it a more flexible option.

Many commercial loans require collateral, which means you'll need to put up assets such as property or equipment to secure the loan. Traditional lenders are more likely to require collateral than online lenders.

For another approach, see: Cross Collateral Loan

Commercial capital loans can be a game-changer for businesses looking to secure funding. Term loans from Capital Bank offer a set repayment schedule and a specific maturity date, usually within five years of the original loan date.

With a Capital Bank Term Loan, you can structure a repayment schedule to accommodate your cash flow cycles, ensuring that your loan payments align with your business's financial needs. Loan may be secured with many different types of collateral.

If you're looking for alternative loan options, you may want to consider SBA loans. SBA loans offer high loan-to-value ratios, easier approvals for start-ups and non-stabilized businesses, and can include closing costs wrapped into the loan.

Here are some key benefits of SBA loans:

Lines of Credit offer flexibility and can be tailored to match the ebbs and flows of your business's needs.

A line of credit from a lender like Capital Bank can provide access to a set amount of funds that you can draw from and use as needed.

You only pay interest on the money you use, and once you've repaid what you've borrowed, the credit line resets.

Lines of Credit can be used to support various short-term working capital needs, including inventory purchases.

Some common uses for lines of credit include:

Traditional lenders are more likely to require collateral for a line of credit, but online lenders may be more flexible in this regard.

Consider reading: Hard Money Lenders for Business Acquisition

Equipment leasing is a viable option for businesses that need equipment but don't want to tie up their capital in purchases.

Leasing business equipment can be more beneficial than purchasing it, especially for businesses that want to upgrade their equipment frequently.

Our commercial equipment leasing program allows us to hold title to the equipment while your business makes lease payments for a specified period of time.

At the conclusion of the lease, your business has the option to buy the equipment, which can be a great way to own the equipment outright.

Some businesses may be able to enjoy tax benefits related to leasing, so it's worth checking with your tax advisor to see if this applies to you.

Worth a look: Equipment Lease Financing

Agency Loan Programs offer a range of financing options for businesses.

The U.S. Small Business Administration (SBA) provides guarantees for business loans for working capital, equipment purchases, or the construction, renovation or purchase of real estate.

Capital Bank participates in various loan programs, including the Pursuit program for real estate or equipment purchases, and the SBA program for working capital, equipment purchases, or real estate.

Some loan programs offer flexible rates and terms, such as the Ohio Regional 166 Loan, which provides a fixed-interest rate loan with a lower down payment and a 20-year term for real estate.

Explore further: Sba Loan Disaster Loan Application

SBA loans can include closing costs wrapped into the loan and offer high loan-to-value ratios, making them a great option for businesses that need more financing.

Here are some benefits of agency loan programs:

These programs can be a great option for businesses that need financing for specific purposes, such as purchasing equipment or real estate.

Commercial capital loans offer a range of options for small businesses, with loan amounts available from $50,000 to $5,000,000.

You can choose from various types of commercial loans, including equipment financing, commercial real estate loans, and commercial construction loans.

Some commercial loans are meant for specific purposes, such as purchasing large or highly specialized equipment for your business.

Here are some examples of commercial loan types:

You can also consider commercial hard money loans, which focus on the value of your collateral when underwriting applications.

Collateral is often required for commercial loans, with traditional lenders more likely to require it than online lenders.

Check this out: Can I Use My Business as Collateral for a Loan

Mortgages are a crucial aspect of commercial lending, and understanding the types and purposes of commercial mortgages can help you make informed decisions about your business's financial needs.

Commercial mortgages are available for owner-occupied properties and/or leased investment properties, and they can be used for purchasing a new facility, expanding existing facilities, or making other improvements to existing facilities.

One type of commercial mortgage is a commercial real estate loan, which is similar to a mortgage and can help you buy or renovate property.

You can also use commercial mortgages to finance new building projects or major renovations with commercial construction loans.

Commercial mortgages can be secured with collateral, and it's essential to understand the types of collateral that lenders accept.

Here are some common types of collateral used for commercial mortgages:

Keep in mind that the specific requirements for collateral may vary depending on the lender and the type of loan.

Term Loans are a type of financing that can be beneficial for businesses with longer-term financing requirements.

A Capital Bank Term Loan can provide a set repayment schedule and a specific maturity date, usually within five years of the original loan date. This allows businesses to plan their cash flow accordingly.

The repayment schedule can be structured to accommodate your cash flow cycles, making it easier to manage your finances. This flexibility is a great advantage for businesses that have irregular income or expenses.

Loan collateral can be secured with many different types of collateral, giving businesses more options for securing their loan.

Discover more: Company Cash Advance

The loan amount can vary depending on the type of loan you're looking for. A Federal loan program is available for small businesses, offering up to $200,000.

For those who need a larger loan, there are options available. The loan amount can range from $50,000 to $5,000,000.

The SBA Express Loans offer a loan amount of $50,000 to $350,000. This can be a great option for small businesses that need a quick influx of cash.

If this caught your attention, see: Average Business Loan Amount

The SBA 7(a) loan offers a loan amount of $350,000 to $5,000,000. This is a more substantial loan option for businesses that require a larger amount of funding.

Here's a breakdown of the different loan options and their corresponding loan amounts:

You'll need to factor in some costs when considering this loan. A $500.00 non-refundable application fee is required at the time of submission to Alloy Commercial Capital.

This fee is non-refundable, so it's essential to review the terms carefully before applying. A 1.5% processing fee will be assessed at closing.

In addition to these fees, you'll need to consider other costs associated with the loan. For example, you may need to obtain life insurance on key business owners.

Here's a breakdown of some of the associated costs:

Commercial capital loans can be a game-changer for businesses looking to expand or upgrade their operations.

To qualify for a commercial capital loan, you'll need to understand what's eligible. Land and building acquisition, for example, are commonly funded through these loans.

Ground up construction or renovation/expansion projects are also eligible, which can be a huge help for businesses looking to upgrade their facilities.

Machinery and equipment purchases can also be financed through commercial capital loans, making it easier to stay up-to-date with the latest technology.

"Soft" costs like appraisals, general surveying, architectural work, and installation costs are also covered, which can be a significant relief for businesses with limited budgets.

Here are some examples of eligible expenses:

The Ohio Regional 166 Loan is a fixed-interest rate loan with a lower down payment. This allows businesses to keep their cash for working capital.

The program offers up to a 20-year term for real estate and up to a 10-year term for machinery and equipment. Unless appraised for a longer life, the equipment term is capped at 10 years.

Lower monthly payments are a significant benefit of the Ohio Regional 166 Loan. This can help businesses manage their finances more effectively.

There's no prepayment penalty with this loan, giving businesses more flexibility. This means they can pay off the loan early without incurring additional fees.

With over 25 years of experience with the Ohio Regional 166 Loan Program, Alloy Commercial Capital's team of experts can make the process simple for businesses and lending partners.