Test Commercial loans

QUESTION 1: HOW DO BUSINESSES USE COMMERCIAL LOANS FOR DEVELOPMENT?

Loans can cover the acquisition of new inventory for our business, or for new workforces
Generally, businesses more advanced in time use it for the purchase of new properties and real estate to put in function of the same business or for a new venture in another field
We can also update our working resources such as maintenance or purchase of machinery and equipment necessary for the development of the company
Otherwise, we can use the loan as an incentive to boost our sales through a marketing campaign

There are two types of loans that we can apply for in a bank, the commercial loan and the personal loan
The commercial loan is requested to finance our business and expenses closely related to it, such as: supplies, materials, means or furniture
Otherwise, the personal loan serves to cover living expenses
There are several types of loans that banks offer us, car loans on credit or installments and mortgage loans for our home or business property

The first advantage is that if we do not have outstanding tax debts, the financing by the bank is immediate, facilitating the saving of time on the part of the procedure
When we do the processing with an entity such as the bank we can be completely updated of the process and confident of the legality and provenance of the money
We can count on a forecast of the payment of the loan debt thanks to fixed periodic installments
Another part of these loans is that they do not cover collateral, and we must specify the amount of what we need

There can always be a question as to whether we can use a personal loan to pay for a commercial loan
It would be a way to refinance our loan with a low-cost loan to pay off a high-cost loan
This could at least save us some interest, but our business would not be legally responsible for this loan, but we ourselves as individuals
The good news is that with legal loan refinancing we have a more specific deduction when filing our taxes

The interest included in the surcharge for commercial loans may vary depending on the type of bank from which the application is made
Interest rates for commercial loans generally range from two to thirty percent on the amount depending on the traditional lenders
For personal loans, on the other hand, it can vary from approximately six to thirty-six percent
We can already see that a commercial loan is less interest-bearing than a personal loan

The commercial mortgage is a type of loan that operates under collateral
Normally a property is mortgaged as collateral for the loan requested
This type of commercial mortgage is generally approved depending on the value of the property
As we know the mortgage has risk factors in exchange for the loan, because if we fail to pay in the agreed time the bank will expropriate the property as a consequence

Lenders need to have proof of our ability to repay the loan and some will require that we have a required time in business of two years or more
There are other types of lenders with whom it is only sufficient to present the profitability of the business even if it is a start-up venture
It is therefore important to have the company's business plan, social security number as well as the legal structure and business licenses in order to apply for the loan from the lender
None of the above

These types of loans are financing mechanisms especially for small and start-up companies
This may be a more advantageous option for our new business, since it allows us to have a longer payment term and a lower interest rate
Sba loans are made through banking institutions but are guaranteed by the government, so that if we default on the agreed term due to inconveniences, the government pays for the loan
As you might expect, not every project qualifies for a loan of this type, and the approval process often takes months, so many entrepreneurs opt for other options to qualify for a loan of this type