Commercial loans can serve as a useful way to get a new endeavor off the ground, or to help a long-established business take its next steps toward growth. But with so many options out there — and so many financial institutions to choose from — the prospect can feel overwhelming. Central Bank’s commercial loan experts have pulled together a high-level overview aimed at helping you better understand the types of business loans available to you, a few considerations to keep in mind and the steps you should take to get started.

What Types of Commercial Loans Are Out There?
Part of what makes the commercial loan process so daunting is the fact that your financing options are virtually endless. At Central Bank, for instance, we customize our small business loans to serve our clients’ individual needs — and help them reach their financial goals. There are, however, a number of commercial loan categories we deal with on a fairly regular basis. Those include:

• Equipment Financing: Loans focused on helping your company gain access to the tools required to carry out your work. The term “equipment” is used fairly loosely here, as such loans can be put toward everything from desks and office chairs, to high-powered industrial machinery.

• SBA 7(a) Loans: Small business loans guaranteed by the U.S. Small Business Administration, and which max out at $5 million. These loans can be used in a number of ways, including being put toward working capital, refinancing business debt, and purchasing supplies and furniture.

• Working Capital Lines of Credit: This short-term loan option makes added funds available to a business for use as it sees fit. Entities have a certain amount of money available to them, which they can borrow, repay and borrow again as needs arise.

• Interim Construction Financing: This short-term loan provides builders financing they can use to purchase, build and complete a property before it sells.

• Professional Financing: Available to working professionals such as doctors, lawyers and veterinarians, these loans are meant to cover costs associated with helping an individual grow their business or advance in their field. Professional financing is especially helpful for professionals who face debt associated with completing their coursework — and find themselves having trouble qualifying for traditional mortgages or loans.

• C&I Loans: Commercial & Industrial (C&I) loans are provided to businesses to help them cover large expenditures, such as the purchase of new properties, vehicles or heavy equipment.

• Patient Lending Options: Financing available to help a medical or veterinary practice’s patients pay unanticipated or extremely costly bills. Patient lending solutions benefit practices by providing speedy payment, and they benefit patients by providing access to non-predatory loan options.

What Should You be Cognizant of When Searching for Commercial Loans?
Your business loan is no small matter. As such, there are a few things you should keep in mind to ensure you’re entering into an agreement that makes sense.

• Take a Close Look at Your Potential Lenders: As we mentioned previously, there are all sorts of options available when it comes to lending companies. We recommend finding a lender who has been in business for a number of years, and who has a proven track record among clients. Delve into your potential companies’ websites to learn about their history, talk with fellow entrepreneurs about those they’ve worked with in the past and consider checking out online reviews, as well. If you already have an established and healthy relationship with a lender, you might seek them out to see if they can help. At Central Bank, for instance, we’ve been serving our Houston friends and neighbors since 1956. And many of the clients we work with on the commercial loan side of things also do their personal and business banking through us.

• Have a Plan in Place for Your Requested Funds: Your lender wants to help you gain access to the funds it takes to make your business goals a reality. Even so, they have to make sure it’s a solid investment on their part. Enter into the commercial loan discussion with as much information as possible. What amount does your company currently have on hand? How much do you need? Where exactly do you plan to allocate those funds? When do you anticipate you can pay it back? What does your past financial history look like? Such information not only helps your lender pair you with the right financial approach, but it can help ensure a smooth business relationship moving forward.

• Consider Your Business Loan’s Terms: Once you’ve secured your right lender and laid out all the details, you’ll want to take a close look at the options they present to you. How do interest rates factor into your commercial loan? What does your payment plan look like? Are there any associated fees? What happens if you pay things off early — or if you miss a payment? Ask as many questions as possible in order to avoid unexpected obstacles down the road. The right lender will do their best to ward off surprises and make sure you’ve found the right fit.

Business loans can feel slightly overwhelming at the start, but going in with a plan — and with the right team by your side — can help. If you have questions on any of the above, or if you’re interested in speaking with our community bank about a potential commercial loan, feel free to reach out. Our team is always happy to help.