Bank Loans Vs. Commercial Financing: The Real Differences

For the longest time, new and small businesses have been tied to bank loans. When launching a business, most entrepreneurs followed the tried and true method of drawing up a business plan, taking out a bank loan, and generating revenue. Businesses continued this cycle at every step of development or growth. Unfortunately, bank loans take a while to pay off, and therefore diminish the amount of revenue a business potentially brings in. As an alternative, many business owners are turning to commercial financing to get the working capital they need, without any of the compromises that come with bank loans.

What People Overlook In Bank Loans

Bank loans take a while to process, and can be accessed by meeting requirements which are often prohibitive to new and small business owners. Entrepreneurs need to provide very healthy financials, a strong borrowing history, nearly impeccable credit, and other criteria to access even basic business loans. Additionally, bank loans compromise business credit ratings and place debt on the balance sheets for years. Ultimately, a single bank loan can prevent businesses from getting further funding until the entire balance is repaid.

The Advantages Of Commercial Financing

Commercial financing offers a number of benefits while simultaneously sidestepping the pitfalls that come with traditional bank loans. Because commercial financing is mostly comprised of people who have been successful in the private sector, the professionals handling funding requests understand the needs of entrepreneurs. Commercial financing programs are processed quickly and efficiently so business owners do not have to put their plans on hold. What is more, most commercial financing products do not have the prohibitive requirements of bank loans. This is because accessible funding builds a diverse and healthy economy by allowing small businesses to thrive.

Zero Debt Options

Perhaps one of the biggest ways commercial financing differs from bank loans is that the former has zero debt options. While all bank loans place debt on the balance sheets, the same cannot be said for commercial financing. Programs such as purchase order financing, asset-based lines of credit, factoring, MCAs and more provide the capital businesses need without saddling entrepreneurs with lots of debt.

Learn More About Commercial Financing

To learn more about commercial financing, and the many debt-free programs offered within, call CounselPro Lending at 1-888-292-3322. Our team of experts will work directly with you to find the financing solutions that will help you reach your business goals.


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