Commercial loans

Our business operates through the constant flow of capital, we use money to generate more money, make it grow. In most cases, and it is advisable when we start a business, we find ourselves in need of an investor, someone with enough capital to get our business idea off the ground. As we have already discussed, banks worldwide function as legal financing entities, and we can reach them through commercial lending. In this way we can generate the necessary funds to continue with our business in case we already have a trajectory.

Commercial loan.

To begin with, the commercial loan can be requested for purposes related to our business. Loans can cover the acquisition of new inventory for our business, or for new employees. Generally businesses with development 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 upgrade our working tools such as the maintenance or purchase of machinery and equipment necessary for the development of the company. In another way we can take advantage of the loan in order to encourage our sales through a marketing campaign.

The personal loan.

There are two types of loans that we can request in a bank, the commercial loan and the personal loan. The commercial loan is requested to finance our enterprise and expenses closely related to it, such as: supplies, materials, means or furniture. On the other hand, the personal loan is used to cover our living expenses. There are several types of loans offered by banks, car loans on credit or installments and mortgage loans for our home or business property.

Advantages of personal loans.

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 like the bank we can be completely updated of the process and confident of the legality and the origin 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 what would be the amount of what we need.

Loan refinancing.

There can always arise the doubt of whether we can use a personal loan to pay a commercial one. It would be the way to refinance our loan with a low-cost loan to pay 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.

Interest rates.

The interest included in the surcharge for commercial loans may vary depending on the type of bank from which we apply. Generally, interest rates for commercial loans range from two to thirty percent on the amount depending on the traditional lenders. On the other hand, for personal loans they can vary from six to thirty-six percent approximately. We can already see that a commercial loan carries less interest than a personal loan.

The commercial mortgage.

The commercial mortgage is a type of loan that operates under collateral. Typically, a property is mortgaged as collateral for the loan requested. Usually this type of commercial mortgage is approved depending on the value of the property; but in the case of a business, it is approved according to its estimated income, for which a tax return must be presented as legal proof of income. 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 our property as a consequence.

Legal structure for loans.

Lenders need to have proof of our ability to repa