As a business owner, it can be both overwhelming and exciting to handle all facets of a company. However, the financial aspect is arguably the most important factor in whether a company prospers. When a business needs help financially, a commercial loan may be the right path. The residents of La Crosse, WI, use River Bank to provide them with personalized commercial loan services that set their businesses up for success. Their banking professionals share what every business owner should know about commercial loans.
Everything a Business Owner Should Know About Commercial Loans
What Is a Commercial Loan?
It is a loan from a financial institution, such as a bank, to a business to fund various activities. As with other loans, the money is paid back to the lender in an agreed-upon timeline, with interest added.
How Are Commercial Loans Used?
Commercial loans are most commonly acquired at the beginning of a company’s life, since start-up costs can be unusually large. They can also be used to buy equipment, inventory, and to make other investments that will lead to higher profits and more success for the business down the road. This includes construction. Without a loan, businesses would not be able to make expensive purchases that can put them ahead of competitors.
How Does Your Business Secure a Commercial Loan?
Your credit score is the largest factor in determining whether someone gets a commercial loan. The lending institution will require proof that the business is in good financial standing with a stable cash flow. For example, the company’s balance sheet will show whether the loan can be repaid in a certain period. The interest rate on the loan will be based on the prime lending rate at the time the loan is secured. Throughout the length of the loan, the lender may expect to see financial statements periodically. This reaffirms the bank’s confidence in the business.
If you’re looking to secure a commercial loan, give River Bank a call at (608) 788-6300. They have more than 25 years of experience and have several convenient locations that make it easier to get financial advice and obtain the right commercial loans for your business. They also offer 24-hour telephone banking so that you’ll always feel secure with your finances. Visit them online to view their variety of services along with their current bank rates.