Small Business Lending: THE PIONEER SPIRIT

2007-03-08 10:33:40

( Business )



PURSUING A DREAM

Everyone dreams of putting up a business from scratch, nurturing it until the venture grows into a big success which means greater financial freedom. Society recognizes that much of its economic growth is due largely to entrepreneurs willing to take an enormous risk and chase that dream.

Most big companies in existence today started out small. Banks and other commercial lenders recognize the value of taking risks to any worthwhile endeavor; that is why they provide small business lending for start-up businesses that do not require a large amount of capital.

Small business lending can either work for start-ups needing capital to get off the ground, or for established businesses looking to expand their operations. The funds you receive from small business lending must only be used for business endeavors and cannot be used for other purposes like paying outstanding debts or purchasing properties.

A BUSINESS OF BUSINESS

If you need more money than what a small business lending can provide, then you may consider commercial mortgage lending. Commercial mortgage lenders are the same banks and financial institutions that provide ordinary mortgages to the public. The only difference is that commercial mortgage lending is primarily a business transaction. Commercial mortgage lending is a secured business loan using your commercial property as loan collateral. Under this arrangement, you can use the borrowed money to purchase other commercial properties

Of course commercial lending rates are computed differently from ordinary, non-commercial loans. Because banks consider small business lending and commercial mortgage lending as an investment on their part, they will as a general policy charge lower interest rates. Depending on your credit background and history as a businessman, you can actually negotiate for loan terms more conducive to your business endeavor.

Small business lending is a big source of commerce for lending companies. The main bulk of their business comes from commercial transactions. These financial institutions recognize the fact that the success of the small businesses means their success as well.


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