Starting or running a business requires capital, and there are many different types of commercial financing available for businesses. From traditional bank loans to venture capital, each type of funding has its own set of advantages and disadvantages.
Business Loans
Business loans are one of the most common types of commercial financing. Lenders offer these loans in the form of long-term business lines of credit or short-term working capital loans. With a business loan, entrepreneurs can secure funding for larger purchases such as equipment or inventory, and terms can range from 3 to 25 years with interest rates based on an individual’s credit score. The biggest drawback is that lenders generally require collateral in order to secure a loan; however, they do offer competitive rates and longer repayment terms than other forms of financing.
SBA Loans
Small Business Administration (SBA) backed loans are an attractive option for small businesses looking to finance their operations because they tend to have more flexible terms than traditional bank loans. SBA-backed loans are granted through traditional banks and other lenders that have partnered with the Small Business Administration to help small business owners secure necessary financing. These loans offer competitive interest rates, long repayment terms, and do not require collateral; however, they tend to take longer to process than traditional bank loans.
Venture Capital
Venture capitalists can provide businesses with large sums of capital in exchange for equity in the company. These types of investors are often looking for innovative ideas or products that will generate a return on their investment; as such, they’re typically more interested in start-ups than established businesses. While venture capitalists can provide substantial capital, they generally want a large share of ownership (anywhere from 30% to 50%) and they may also have a say in how the business is run.
Invoice Factoring
Invoice factoring is another type of commercial financing that allows businesses to receive immediate payment for their invoices. This type of financing involves using a third-party factoring company that essentially purchases the business’s accounts receivable at a discounted rate. Invoice factoring can be an attractive option for businesses in need of quick funding, however, it tends to have higher fees and interest rates than other forms of commercial financing.
No matter what type of business you’re running or how much capital you need, there are many different types of commercial financing available to help your business reach its goals. Synergy Commercial Funding offers a wide range of business financing solutions without the restrictions, high requirements, or long closing times of institutional lenders. Contact our team today to get the financing you need.
Are you looking for financing options for your business? If so, Synergy Commercial Funding is ready to help. We offer a wide range of commercial finance services to help businesses of all sizes achieve their objectives, whether it’s purchasing new equipment or purchasing a new commercial property.
Interested in creating a second line of income just by talking with your existing network? Want to help the economy grow by helping businesses around you grow? Think about becoming a Synergy Commercial Funding Partner. Visit our "Referral & Broker Program" to learn more.
