Choosing a Commercial Lender

Almost any commercial lender can provide funding for a profitable company with 10 years in the business. However, if that describes your situation, you won't need much help in finding a lender! More common are small businesses that want to grow or companies facing some business challenges they need to overcome.

Unfortunately, some banks just don't make an effort to reach out to small businesses. Others might not want to take a risk with a less established company or be able to handle the size loan you need. However, there are commercial lenders out there for almost any type of loan - it's just a matter of finding them. It's important that you evaluate prospective lenders just as carefully as they're evaluating you.

The right type of loan
Each financial institution will focus on different types of loans. Some prefer to focus on real estate loans: mortgages and leases. Others may emphasize equipment loans or ongoing lines of credit.

Each commercial lender will have a different attitude towards risk, as well: more conservative commercial lenders such as banks will avoid riskier loans, while other lenders may take on more risk as part of their philosophy. Deciding what type of loan you need and honestly evaluating your situation can help you choose the right type of commercial lender.

The right size
Rarely are commercial lenders too small for small to medium sized businesses. If they don't have the cash to handle your loan directly, they may break it into smaller chunks and have other lenders take on parts of the debt. This doesn't usually affect the total costs of the loan - the broker works out the fees with the participating banks.