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Commercial Loans

Fast & Accessible Financing Solutions

All businesses need money to sustain operations and grow. But, in reality, it’s not always there when you need it.

Fortunately, there are many commercial loan and financing options available today for small business owners — from traditional term loans to merchant cash advances.

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What Is a Commercial Loan?

A commercial loan is any type of debt financing issued to a business. Commercial loans come in many forms with unique repayment structures. But, regardless of type, they serve a unified purpose: to provide funding for all things small business.

In fact, options once considered “alternative” are now more widely adopted and, many times, the first choice for business owners looking to secure commercial financing.

How Do Commercial Loans Work?

Since there are multiple types of commercial loans, how they work will be dependent on the option you choose. 

Here are the most common types of commercial financing and how they stack up.

Short Term Commercial Loans

Short term commercial loans provide your small business with a lump sum of working capital that must be repaid within 3 to 18 months. They’re known for their accessibility and speed. 

Through these commercial business loans, you can receive same-day funding to finance renovations, inventory or any other immediate need.

Key Considerations:

  • Funding Amount: Up to $500k
  • Interest Rate: As low as 10%
  • Term: 3-18 months
  • Time-to-Funding: As fast as same day

Qualifications

Qualifying for short term commercial loans online is easier than qualifying for financing at your local bank.

Do You Qualify?

  • Time in Business: 1+ years
  • Annual Revenue: $75,000+
  • Credit Score: 540+

Is a Short Term Commercial Loan Right for You?

If an unexpected expense puts you in need of capital, short term loans may be right for you. Commercial loan lenders are less critical of applicants thanks to the abbreviated terms and lower amounts, resulting in higher acceptance rates and faster approvals.

Consider one today if:

  • You need short term funding for your next project
  • Your bad credit history disqualifies you from long term commercial loans
  • You need a quick turnaround

Business Term Loan

Business term loans are given to commercial companies as a lump sum and they’re repaid over 1 to 5 years. They’re best used to finance large projects like debt refinancing, equipment purchases and commercial real estate.

Qualified candidates will find that interest rates aren’t too far off the best commercial bank loans, starting at 7%. 

Unlike banks that can take months, Fast Capital 360 can give you options from some of the best commercial loan lenders in as little as 1 business day.

Key Considerations:

  • Funding Amount: Up to $250k
  • Interest Rate: As low as 7%
  • Term: 1-5 years
  • Time-to-Funding: As fast as same day

Qualifications

Because long term commercial financing involves more money and longer terms, lenders have stricter qualification requirements. If you have bad credit or lower revenues, you may need to pursue another commercial loan option.

Do You Qualify?

  • Time in Business: 1+ years
  • Annual Revenue: $200k+
  • Credit Score: 600+

Is a Term Loan Right For You?

If you’re planning a costly new project for your business, term loans may be right for you. Although they’re harder to qualify for and commonly require collateral, the longer, predictable repayment structure and lower interest rates make them ideal for qualified borrowers.

Consider one today if:

  • You’re planning to buy expensive equipment or real estate
  • You prefer a long repayment term

SBA Loans

SBA loans are partially guaranteed by the Small Business Administration (SBA). As a result, lenders face less risk of default and thus, open up access to financing opportunities for more businesses.

SBA loans offer some of the most favorable commercial loan rates and terms on the market. But working with the government does take time. You’ll have to wait 3 to 4 weeks at least to receive funding.

Key Considerations:

  • Funding Amount: Up to $5 million
  • Interest Rate: Starting at 6.25%
  • Term: 5-25 years
  • Time-to-Funding: As fast as 30 days

Qualifications

SBA lenders will only extend capital to small businesses they deem ‘financially fit’ making it more difficult to qualify.

Do You Qualify?

  • Time in Business: 2+ years for most programs
  • Annual Revenue: $50k+
  • Credit Score: 650+

Is an SBA Loan Right For You?

Low interest rates and long terms are the hallmarks of SBA financing, making it an attractive option to small business owners. But they’re not for everyone.

Consider an SBA loan if:

  • You’re not in a hurry
  • You have good credit, but don’t qualify for a conventional commercial bank loan
  • You care about costs

Equipment Financing

Equipment financing gets you the capital you need to lease or purchase equipment for your small business. 

Since the equipment itself is used as collateral to secure the loan, you can finance up to 100% of the purchase price and pay for it over the life of the term.

Key Considerations:

  • Funding Amount: Up to 100% of equipment cost
  • Interest Rate: Starting at 8%
  • Term: 1-5 years
  • Time-to-Funding: As fast as 2 days

Qualifications

Compared to short term loans and alternative forms of funding, equipment financing has tougher qualification requirements.

Do You Qualify?

  • Time in Business: 2+ years
  • Annual Revenue: $160k+
  • Credit Score: 620+

Is Equipment Financing Right for You?

When you have a need to purchase or upgrade equipment, this is the right type of commercial financing for you.

Consider equipment financing if:

  • You need quick access to funding to purchase or replace outdated or damaged equipment
  • You can’t afford to pay for the equipment outright

Business Line of Credit

With a revolving business line of credit, you’ll have a pool of funds to draw from on an as-needed basis. Much like your business credit card, you only pay interest on what you withdraw.

Key Considerations:

  • Funding Amount: Up to $250k
  • Interest Rate: Starting at 8%
  • Term: 6 months- 2 years
  • Time-to-Funding: As fast as same day

Qualifications

The flexibility of a business line of credit means they’re a bit harder to qualify for. You’ll need to have strong sales and a fair credit score to be considered.

Do You Qualify?

  • Time in Business: 1+ years
  • Annual Revenue: $200k+
  • Credit Score: 560+

Is a Business Line of Credit Right for You?

If you want to get a commercial loan that you can use for any ongoing working capital needs, a business line of credit is right for you.

Consider obtaining a business line of credit if:

  • Your need for funding is open-ended
  • Project costs could exceed your original estimates

Merchant Cash Advance

A merchant cash advance (MCA) is a sum of capital that is borrowed against a business’s future sales. This means that, unlike types of commercial loans that are paid through installments, payments are drawn from the lender either by credit card holdbacks or daily ACH payments.

Also, unlike other commercial loans that use interest, MCAs use factor rates to determine the payback amount. This means you’ll have to pay the total amount agreed at signing, even if you pay off the amount early.

Key Considerations:

  • Funding Amount: Up to $500k
  • Factor Rate: Starting at 1.10
  • Term: 3-24 months
  • Time-to-Funding: As fast as same day

Qualifications

Merchant cash advances have lower qualification requirements than most commercial funding options. This allows small business owners who may not have a long or positive credit history the chance to grow their business.

Do You Qualify?

  • Time in Business: 4+ months
  • Annual Revenue: $100,000+
  • Credit Score: 500+

Is a Merchant Cash Advance Right for You?

If you need to fill an urgent need, merchant cash advances are for you. With an MCA, you can get cash fast to address any emergency.

Consider an MCA if:

  • You need funding today
  • There is an emergency that requires working capital
  • You have trouble qualifying for other bad credit commercial loan options

How To Apply for Financing

How to Apply for a Commercial Loan Online

With Fast Capital 360, it’s never been easier to apply for a commercial loan.

Through our simple and secure application, we match business owners with some of the best commercial loan lenders across the country so you can choose the best option for your business.

How Much Do Commercial Loans Cost?

Commercial loan costs vary. For the funding options that use interest calculations — short term, business term, SBA, equipment financing and business lines of credit — you’ll pay a mix of interest and principal in weekly or monthly installments. 

Some lending product fees are calculated using factor rates. In these agreements, you’ll always pay the set payback amount, whether you satisfy your loan in 3 months or 6.

Let’s look at a few examples.

Commercial Loan Repayment Examples

Take a look at this example of a construction loan used for commercial real estate:

You take out a commercial loan for $250,000 with an interest rate of 7%. Your repayment term extends 10 years. Over that time, you’d pay $98,325 in interest. To calculate the total repayment, you’d add the total amount paid in interest to the initial loan amount. In this case, your total repayment amount would be $348,325.

Now, imagine you’re a business owner who needs funds for an emergency expense. 

You need $5,000 and you take out a merchant cash advance. You’re approved for an MCA at a factor rate of 1.18. With a repayment term of 6 months, you would pay $47 per day and make 126 payments. Your total repayment amount would be $5,900. 

How Will You Use Your Commercial Loan?

No matter how you want to use a commercial loan, there’s an option for you. Whether you need money for a new truck, brand new equipment or debt refinancing, Fast Capital 360 can help. We work with an extensive network of commercial loan lenders so you can obtain financing to: 

  • Grow: Growth is the key to success. Commercial financing can provide the capital you need to take your business to the next level.
  • Sustain Operations: Keep your operations running smoothly by financing the tools and the team that make it possible.
  • Bridge Gaps in Cash Flow: Fast commercial loans can help you fill temporary cash flow gaps so you can continue to meet your various financial obligations.

 

Ready to see how your business can grow with a commercial loan? Success Stories