Commercial loans in San Antonio, Texas
Commercial loans are a debt-based financing arrangement between a lender and a borrower. However, the defining characteristic of a commercial loan is that they’re aimed at businesses. Commercial lending is typically used to cover operational costs or finance major capital expenditures and fund projects that the company may not be able to afford outright. Due to regulatory hurdles and rather pricey upfronts, commercial loans aren’t really accessible to small businesses, which might have to rely on other financing methods or products for funds, such as credit union loans.
How Commercial Loans Work?
Commercial loans are granted to business entities to assist with whatever type of funding the business might require. This includes the purchase of operation-critical equipment and covering operational costs.
In some instances, the loan can be granted to refinance another loan or extended to meet other business needs, like funding a payroll or purchasing supplies used in manufacturing and production processes.
Commercial loans often require that borrowers post some form of collateral, usually in the form of commercial real estate or other commercial property types that the bank can repossess in case the business defaults on a loan or files for bankruptcy. This type of loan is usually categorized as a secured, short-term loan.
It’s worth noting that most commercial loan programs require careful consideration of the borrower’s creditworthiness, such as their credit score. In most cases, the loan application process requires that business owners submit the required documents that prove a favorable cash flow as an additional assurance to the lender.
Once the commercial loan is approved and the bank transfers the loan amount to the borrower, the borrower can expect to pay an interest rate on top of the monthly installment. Some banks also impose additional conditions, like monthly submission of financial statements by the business and insurance of equipment bought using the funds from the loan.
Types of Commercial Loans
There are different types of commercial loan options, and some are meant for specific purposes, such as:
Equipment financing: These loans are designed to buy large amounts of highly specialized equipment.
Commercial real estate loans: Similar to mortgages, commercial real estate loans can help a business renovate its existing property or buy an investment property.
Commercial auto loans: This type of loan is, as its name implies, used to buy a vehicle for your business.
Commercial credit cards: A short-term financing option that allows the business to enjoy credit card benefits and flexibility for commercial spending.
Get Commercial Loans in San Antonio
If you’re looking to secure a commercial loan for your business in San Antonio, Texas, contact River City FCU; we offer a range of both personal and business lines of credit, credit cards, vehicle loans, and many other financial products and services.