For businesses seeking to expand or manage their operations, a variety of commercial loan options are available to meet different financial needs. Below, you'll find definitions of key commercial loan types, designed to help you match your clients with the right solution from your business.

Agricultural Loan

An agricultural loan is designed for farmers and agri-businesses to finance the purchase of land, livestock, or other farming needs. For example, this type of loan could help a farmer buy new land to expand their operations.

A bridge loan provides temporary financing to cover short-term needs until long-term financing can be secured. For example, if you're buying a new commercial property but need funds while waiting for the sale of another property, a bridge loan can help fill the gap.

This loan is used to finance major repairs or the replacement of essential equipment in a business. For instance, a business owner might use this loan to replace outdated HVAC systems or make necessary repairs to the building's structure.

A construction loan provides funding to build or significantly renovate commercial properties. The loan is typically disbursed in stages as the project reaches specific milestones, such as the completion of the foundation or roofing.

An equipment loan helps businesses finance the purchase of machinery or equipment needed for their operations. For example, a manufacturing company might use an equipment loan to buy new production machines or delivery trucks.

Line of Credit
A line of credit allows businesses to borrow funds as needed, up to a certain limit, and pay interest only on the amount borrowed. This is useful for covering short-term expenses like inventory purchases or unexpected costs.

A commercial mortgage or real estate loan is used to purchase or refinance commercial properties, such as office buildings, warehouses, or retail spaces. For example, a business might take out a real estate loan to buy a new office building or refinance an existing one at a better rate.

Working capital in commercial loan options refers to the funds a business uses to cover its short-term operational expenses, such as inventory, payroll, and day-to-day costs. It is the difference between a company's current assets (like cash, accounts receivable, and inventory) and its current liabilities (such as accounts payable and short-term debts). Lenders often assess a business's working capital to determine its financial health and ability to meet short-term obligations, which can be crucial when considering loan approvals for ongoing operations or business expansion.