It takes more than hard work to grow a business. It takes capital.
Twenty years ago, half the commercial loans made by financial institutions were “small” loans under $1 million. This made credit an accessible tool for entrepreneurs in the process of growing their business. Today, the number has dropped to less than one-third. Lending guidelines have tightened and capital availability continues to shrink as banks focus on more lucrative loans of $1 million and above.
However, utilizing low-interest commercial loans remains the most effective way to grow your business. Unlike pulling from your savings or getting venture capital, which are feasible only to a select few, commercial loans are available to anyone with the necessary credit and cash flow. In fact, commercial loans provide you with significant growth opportunities at a fractional cost. For example, a loan at 4.5% interest rate that decreases your costs by 20% equals a net gain of 15.5% to your bottom line. To put it more simply, if you purchase raw materials with the bank’s money at a discount of 20% (instead of drawing on vendor credit), your profit margins increase by 15.5%. This is a substantial jump in earnings that doesn’t require giving up equity or control of your business. Commercial capital and debt financing can help you:
- Purchase commercial real estate.
- Refinance existing loans at a more favorable rate.
- Pay for construction or improvements to your business.
- Acquire discounted machinery, tools, inventory, or software.
- Negotiate lower rates with your suppliers.
- Expand your current business or open a second location.
- Use working capital to cover payroll or other immediate expenses.
- Launch a new product or service.
However, you don’t just want to get a loan. You want to get the right loan for your business.
You can’t get the right deal if you don’t go to the right bank.
Every business is different, and not all banks lend alike. Although most banks offer the same lending products, in actuality they do not all lend at the same rates or to the same borrowers. For example, some banks are speciality lenders, focusing on the entertainment, security, or transportation industries. Others may focus on community revitalization or social impact. Knowing where to go means the difference between a funded application and a series of declines with little or no explanation. It also results in better terms and more attractive rates. We take a comprehensive approach to Access to Capital, working with you from start to finish. Services include:
- Debt Service Coverage Analysis
- Sales and Profitability Analysis
- Accounting and Bookkeeping
- Industry Benchmarking
- Preparation of Interim Financials
- Development of Executive Summary and Business Plan
- Use of Funds Worksheet
- Loan Packaging
- Loan Submission
Want to learn more?
Read our case studies and industry reports.