Commercial Financing Options for Small Businesses

Commercial Financing Options for Small Businesses
  • Opening Intro -

    For small business entrepreneurs seeking financial assistance, there are a few choices available to them.

    Interest rates can vary just as much as the loan choices, therefore it is important to research what is out there to pinpoint the loan option that fits your needs.


Business or commercial loan financing can help your enterprise not only succeed but prosper. Read on and we will take a look at four choices that may be available to you:

Main Suppliers

To sell products, most suppliers need intermediaries to sell inventory for them. Undoubtedly, you are already acting in a capacity of agent, a person who sells products offered by suppliers to your customers. Quite simply, it is this supply of goods that costs you money when you purchase them from the supplier, mark up the prices, and turn around and sell them to your customers for a profit.

Rather than tying up your money in unsold goods, you can have your suppliers provide inventory to you at no cost for an extended amount of time. Basically, you would be receiving a business commercial financing loan where you pay nothing until the goods have been sold. You have much more leverage to conduct such a deal if you are helping a supplier move a slow selling product.

Leasing Companies

If your company needs to lease important equipment, e.g. computer systems, office furniture, construction equipment or manufacturing equipment, then you may be able to negotiate a commercial financing loan which has highly favorable terms. Office equipment is a very competitive industry, therefore as a leaseholder you can likely garner interest-free financing.

Negotiate the best lease deal first before asking for favorable financing terms. You are in a position of strength here, but do tread carefully. Get more than one quote and compare the terms.

Asset-Based Loan

You may be asset rich, but cash poor so how do you translate that into a business commercial financing loan? Well, your assets can include equipment, a building, and a parcel of property, virtually anything of value. The equity in that particular asset is something that can be used as collateral for a loan from your bank.

Take a hard look at everything that you own and ask yourself if you are willing to take out a loan based on the value of that asset. Remember, if you default on your loan, then that asset can be seized.

Venture Capitalists

Maybe you have an invention or some unusual product that you want to sell, but have no reasonable way of bringing the product to market. You could go to the Small Business Administration and approach them for a loan, however if you are rejected where can you turn? Fortunately, venture capitalists make their money off of risk taking business opportunities and they are one source of business commercial financing loan to consider.

The vetting process is a long one with venture capitalists as they will have to perform due diligence to make certain that you have something that they want. In exchange for their loan, you can expect to pay a high rate on your profits or hand over a stake in your business. Sometimes, special lending comes with special conditions.

Financing Options

Other business commercial financing loan options can be found through your state’s economic development department, from financial institutions such as banks and credit unions, or through anyone else with deep pockets who believes in what you are doing. Consider family members too, individuals that know you and may believe in your business model.

Further Reading

Entrepreneur: Six Mistakes Entrepreneurs Make When Seeking Venture Capital —

Business Finance Magazine: It’s Time to Take a Fresh Look at Asset-Based Lending —

Author Information

Albert Duran is a freelance writer in Phoenix, Arizona. He is an expert in financial planning. He writes mainly on term life insurance as well as Compass Quote Final Expense Quotes.


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