Depending on the individual banks the specific definition of the commercial loan happens to differ. But in a broader perspective, if considered generally then, it can be defined as one of the following:
- They are the higher value business loans (in excess of $1 million)
- They are availed for purchasing commercial property / real estate
- They are general business loans (ie. loans with commercial intent)
Normally, the loans are availed in any kind of business for hiring staff, buying equipment, for unforeseen or calculated expenditures of the company and many more possibilities.
What’s a commercial loan used for?
- Hire New Workers
- Improving the Cash Flow
- Marketing and Advertising Cost
- New Equipment Purchase
- Opportunities to Franchise, Export or Expand
Why Would One Need A Commercial Loan?
To have an adequate cash flow in a business or to keep a company running is a very essential thing. Many times, there is a cash crunch in the business, but the working of the business can not be stalled, as the plans of franchising or exporting must continue to keep the business running. That is when these kinds of commercial loans come in handy. At times to raise the brand awareness of the company, a marketing or an ad agency needs to be hired, which again is a costly affair for the business owner.
The commercial loan acts as a saviour then where the commercial loan interest rates are again based on the banks you approach.
These small business loans are typically used for hiring new staff, business expansions, purchasing new fit-outs and equipment. Some common circumstances that might require a commercial loan also include:
- Expansion Opportunities
- Employee Increase
- Maintenance Issues
Should you use a mortgage broker?
A business loan broker performs a role just like a mortgage broker or indeed any other brokerage firm. They will act as a middle man between those seeking a loan and the loan providers. They’ll collect information on your business and with your approval apply to small business loan providers on your behalf.
- Specialist knowledge and longstanding relationships
- Work with both banks and designated loan providers
- Better rates than going direct
Covering all the 3 aspects of brokerage, APW Finance is one such brokerage firm that gives the best, efficient service. For more information visit commercial property loans in Australia.
Experienced Director with a demonstrated history of working in the accounting industry. Skilled in Tax Preparation, Self Managed Superannuation Funds (SMSF), Accounting, Income Tax, and Tax. Strong professional with a Master of Applied Finance focused in Taxation from University of Western Sydney.