The company credit line is essentially what it sounds like. A lender gives a bank a rolling credit line. Most businesses use it to cover temporary cash flow issues. Banks have been known to call these lines, so you have to be careful.
Factoring is an area that is very unique. It is a form of financing whereby a lender essentially buys the accounts receivables of a company at a discounted rate. Instead of being required to wait 30, 60 or 90 days to get paid, a company can get money now.
One area of great flexibility with commercial financing is the asset based loan. The name says it all. If you own it, a lender will give you a percentage of the value in exchange for a security interest and reasonable interest rate.
Many businesses run into situations where they desperately need money for a week or two to bridge a gap between spending and receiving money. Hard money loans fill this gap. They are done in a snap, but are very expensive.
All assets of a business are financeable. Yes, even equipment. Lenders will finance commercial equipment by giving businesses a percentage based on the value and the useful life of the equipment. Eighty percent LTV is normal.
Getting a loan for your home and an office building might seam similar, but they are not. Commercial property loans are much more complex. The issues are many including the amount of revenue the property will produce.
You are a manufacturer and need new manufacturing equipment. A capital term loan is probably your best option. The loan takes into account the cost of the equipment, the useful life of it and the overall condition of the finances of the business.
Even the lenders in the commercial world are different. While there are banks, private money is a big part of the game. Investors pool their money and make loans just like banks. Make sure you consider this option, as they can offer good terms.
Business financing is much more involved than personal finance. Know what you are getting into. Expect everything to be ten times as complex. Lots and lots of paperwork is going to be required, but it is the road to business success.
