A Guide to Commercial Lending by Jules DeLuzio
July 26, 2023

Whether you’re a small business owner looking to expand or an entrepreneur seeking capital to launch a new venture, understanding the ins and outs of commercial lending in the suburban Philadelphia region can be a game-changer. In this article, we will explore the various aspects of commercial lending in our area, including loan options, key players, and factors to consider when seeking financing.

1. The Commercial Lending Landscape:
Our area boasts a diverse and competitive commercial lending market, comprised of national banks, regional banks, community banks, credit unions, and alternative lenders. Depending on your need, any one of these institutions can play a significant role in providing your business with a commercial loan to help your business grow and achieve success.

2. Types of Commercial Loans Available:
Commercial lending in our region offers a range of loan options tailored to meet specific business needs. These include:

a. Commercial Real Estate Loans: Ideal for acquiring, developing, or refinancing commercial properties like retail spaces, office buildings or warehouses.

b. Small Business Administration (SBA) Loans: Backed by the federal government, SBA loans offer favorable terms for small businesses, facilitating growth and expansion.

c. Equipment Financing: Provides funds to purchase or lease equipment crucial to business operations, such as machinery, vehicles, or technology.

d. Working Capital Loans: Designed to cover day-to-day operational expenses, manage cash flow, or fund short-term projects.

3. Key Considerations for Commercial Borrowers:

When pursuing commercial lending, it’s essential to keep the following factors in mind:

a. Creditworthiness: Lenders typically assess a borrower’s credit history, financial statements, and business plan to evaluate creditworthiness. Maintaining a strong credit profile and demonstrating a solid repayment capacity can increase the likelihood of loan approval.

b. Collateral: Depending on the loan type, lenders will require collateral to secure the loan. Assets like real estate, inventory, or equipment can be used to provide security for the lender.

c. Interest Rates and Terms: Different lenders offer varying interest rates and repayment terms. Comparing options and negotiating favorable terms can help borrowers save money and manage their debt more effectively.

d. Relationship Building: Building strong relationships with lenders can lead to future opportunities, such as access to additional financing or preferential treatment during the loan application process.

4. Alternative Lending Options:
Recently, the commercial lending landscape has seen a rise in alternative lending sources, such as online lenders and peer-to-peer lending platforms. These options provide businesses with flexibility, faster approval processes, and increased accessibility to capital, especially for those who may not meet traditional lending criteria.

5. Government Programs and Support:
There are various government programs and initiatives to support local businesses as well. These include grants, tax incentives, and loan programs designed to foster economic growth, especially in targeted industries or underserved communities. Familiarizing yourself with these resources can provide valuable assistance when seeking commercial financing.

Navigating the commercial lending landscape requires a comprehensive understanding of the available loan options, key considerations, and the local business climate. By leveraging the diverse lending market, maintaining a strong credit profile, and exploring alternative financing sources, businesses can seize the opportunities presented by this dynamic region. Remember, each loan application is unique, so take the time to research, compare offerings, and build relationships with lenders who align with your goals. With the right approach and due diligence, choosing the right commercial lender can be a catalyst for your business’s success.