All That You Need to Know About Commercial Finance Before You Start a Business

In a very simple term Finance means providing funds to a person or an enterprise that requires it. Commercial finance is the process of offering Loans to businesses of every size. It is usually offered by Banks, NBFC’s or other Lenders. Most commercial banks offer loans are either secured by business assets or alternatively can be unsecured. There are different criteria regarding business and commercial finance for both lenders and borrowers across countries.

List of Financial Institutions

Here is the list of institution that provides commercial finance.

1. Commercial Banks

2. Universal Banks

3. Life Insurance Corporation (LIC)

4. General Insurance Corporation (GIC)

5. Mutual Funds

6. Investment Companies

Why you need Commercial Finance?

There are various types of Commercial Finance provider available in the market, so it is very important to understand the right kind of Commercial Finance. It is important to decide about certain questions before individuals or companies start the application for commercial finance:

1. Why you need the finance.

2. The term for the finance.

3. The amount of money you need.

4. The risk in your business sector.

5. The rate of interest.

Different type of commercial finance

There are different types of commercial finance options available in the market to provide the particular solution for the business needs for every aspect in life. Commercial mortgages are much alike the homeowner loans, while personal and business loans are same products packed for different customers but there are also number of commercial finance options available that are unique to the world of business.

Some of the commercial finance options to choose from are

1. Short Term:

2. Overdrafts

3. Business credit cards

4. Trade credit

5. Invoice factoring

6. Invoice discounting

7. Medium Term:

8. Bridging finance

9. Crowd funding

10. Peer-to-peer lending

11. Equipment leasing

12. Long Term:

13. Commercial mortgages

14. Business loans

15. Asset-based lending

Check what type of commercial finance is Right for you

1. Business finance funding has now received an all new dimension, with the introduction of working capital, and the ability of business owners, to use the working capital in business cash advancement programs.  The term

2. Your asset bases

3. The size of your business

4. The reason for the finance

5. The sector you operate in

6. Your risk profiles

7. The amount of money you need

People who are eligible for commercial finance

There are plenty of options available for commercial finance that suits your type of business you have. Anyone who owns a business can apply for business finance, but there are some types of finance which may not be well suited to you.

Choose which is required Debt or Equity

Debt and Equity are the two types of funding available. It is your duty to determine the most suitable Finance type available for you. Debt Loan comes from a commercial finance company. It is a type which you need to pay back with interest. On the other hand, Equity is a type which come from an individual who sees a potential in your company and invest in it.

Role of a Financial Advisor

A huge range of finance options exist for growing businesses, so it’s always advisable to seek a little expert help. There are multiple options available in the market to channelize revenue from your commercial ventures and it is important to choose a lender depending on the certification and experience. Although there are many working capital businesses that work on a large scale, it is important to choose a company that has a competitive price and a good service in the market.