Support Your Company’s Growth Through Strategic Commercial Lending Solutions

November 5, 2022

The past few years’ events have led to an increasingly volatile and changing economy. Ongoing supply chain and logistics concerns, and more recently, global geopolitical events, have all had severe impacts on businesses and economies worldwide.

In business, increasing profitability and managing sustainable growth can be challenging enough in comparatively calmer times. With the added complexities brought about by current events, companies need to leverage every advantage they can to ensure continued expansion.

A commercial loan can be an excellent option to help your business develop a robust growth strategy as a response to uncertain times.

Reasons to Seek Commercial Lending

Businesses seek commercial lending services for various reasons, generally in the hopes that the borrowed capital can be used to ensure increased profitability or growth, especially during difficult economic times. Commercial lending is available from a variety of sources, and businesses can often leverage a range of business assets as collateral, if needed.

To Purchase Real Estate for Expansion

Loans can be used by businesses in a variety of ways. Some companies may seek to expand real estate as part of their growth strategy, either for use as offices or such things as manufacturing and warehousing. Commercial lending as a path to expansion is one of the most common reasons businesses may seek a loan.

Working Capital

Another reason may be to increase working capital, which is critically important for businesses in order to run daily operations. A loan of this nature may be approved based on a company’s credit as well as a solid commercial strategy or business plan. A banker’s understanding of their client, the nature of their business and a view of long term growth plans are important in order to help businesses create a lending strategy which provides the working capital needed a certain stages of growth.

To Purchase Inventory

For some businesses, commercial lending may provide a viable option to cover the up front cost of new inventory. Retail businesses, as an example, often experience seasonality in sales at certain times of the year or during holiday seasons, depending on their business.

In order to prepare inventory for their “high season”, commercial lending offers many businesses the liquidity needed to ramp up production, and the ability to pay down the loan over a defined period in line with the seasonality of their sales.

To Purchase Equipment

Many businesses are faced with the challenging decision of buying or leasing equipment in order to operate their business. Both offer some advantages, which may vary from business to business, and it is an important decision to make. For some, the advantages of purchasing and owning equipment, as well as potential tax benefits, offer a compelling motivation to seek commercial lending as a means to purchase equipment.

In many cases, purchased equipment may be deprecated over the entirety of its lifespan, and some businesses may also claim tax deductions when buying equipment with a business loan. Loans of this nature are generally short- or intermediate-term loans, and can be an invaluable tool for businesses to secure the equipment they need for growth.

Advantages of Commercial Lending

A business loan can provide many benefits to a growing company. A loan can cover the cost of hiring and training new staff, bringing new products to sale, or expanding into new markets. Through the use of commercial lending solutions, companies can access the fuel they need to grow beyond what is often possible using cash on hand.

For smaller businesses, especially in the early stages of their growth, a strong commercial lending strategy can be key. By reducing the need to sell equity in an effort to increase capital, entrepreneurs are able to maintain hard-earned equity while accessing much needed cash for growth.

Growth Through Commercial Lending

Commercial lending can enable a business to grow more quickly and effectively than may otherwise be possible. As part of a solid commercial growth strategy, a well-timed commercial loan, tailored to meet the needs of a business, can offer a huge advantage.

There are many reasons for businesses to explore commercial lending as part of a comprehensive plan. Our trusted experts can help develop a strategy which is based on each business’s goals, and can recommend commercial lending options to help reach those goals. We look forward to helping grow your business responsibly.