Down Payments for Commercial Loans

Commercial lenders expect you to have a stake in any loan request. SBA guaranteed loans will allow borrowers to put down payments as little as 10%-15% toward their projects; but, traditional sources will require as little as 20%-50% a a down payment. It is important to be prepared to put your “skin” in the game, otherwise commercial lenders will not consider your loan request valid.

100% financing is almost a thing of the past. For those individuals needing higher leverage loans on equipment, equipment leasing is a good option. In many cases equipment leasing companies will offer 100% financing for new and used equipment. This is one of the only sources I’m aware of that offers a 100% financing solution for businesses.

Keep in mind that leasing companies do not fund many start up requests. The “skin” the leasing companies look for is a viable business established for more than 12 months. When you consider this, you could challenge whether a lease is truly a 100% financing source.

We often advise businesses on what their down payments will be. Your down payment doesn’t always need to be cash. In some cases land or other business assets can be pledged in place of a cash down payment. If you don’t have the ability to meet the down payment requirements, we advise you find a business partner that can fill in the down payment gap. This will save you more money than pursuing cash for the entire project and allow you to keep more interest in your company.

There are too many ways we can assist you in consulting around your loan request. Commercial lending experts still refer to commercial lending as an art. Lets review your case today and put you on the path to success.

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