Commercial Loans FAQs

With Fast Capital 360, it’s never been easier to apply for a commercial loan.

Through our simple and secure application, we match business owners with some of the best commercial loan lenders across the country so you can choose the best option for your business.

Applying is fast, easy—and most importantly—won’t impact your credit.

What you’ll need to qualify:

• 
  Time in business
  1+ years
• 
  Annual revenue
  $75K+
• 
  Credit score
  540+

Securing a commercial loan can be as simple as completing an online application, submitting recent bank statements and meeting minimum credit score and revenue requirements.

—

That said, conventional lenders and some loan types, such as SBA loans, may require additional items when applying for a commercial loan, including:

• Collateral
• Personal background statement
• Personal financial statement
• Business plan
• Profit-and-loss statements
• Business and personal income tax returns
• Articles of incorporation

Lenders will evaluate your commercial loan application, credit history and company finances to consider the level of risk involved in loaning you funds.

Commercial lending rates are determined based on your business’s financial health. Lender considerations vary but can include:

• Personal and/or business credit score
• Loan amount
• Loan repayment period
• Use of funds
• Down payment amount

Additionally, some lenders calculate your rate off a base rate, such as prime. Specifically, your commercial loan interest rate could be a percentage above the prime rate.

Commercial loan costs vary. For the funding options that use interest calculations — short term, business term, SBA, equipment financing and business lines of credit — you’ll pay a mix of interest and principal in weekly or monthly installments.

Some commercial lending product fees are calculated using factor rates. In these agreements, you’ll always pay the set payback amount, even if you pay back your loan ahead of schedule.

Estimate your total cost of borrowing using our commercial loan calculator.

Since there are multiple types of commercial loans, how they work depends on the option you choose.

Here are the most common types of commercial financing and how they compare.

Short-term commercial loans

Short-term commercial loans provide your small business with a lump sum of working capital that must be repaid within 3 to 18 months. They’re known for their accessibility and speed.

Through these commercial business loans, you can receive same-day funding to finance renovations, inventory or any other immediate need.

Key considerations:

• Funding amount: Up to $500k
• Interest rate: As low as 10%
• Term: 3-18 months
• Time to funding: As fast as same day

Qualifications

Qualifying for short-term commercial loans online is easier than qualifying for financing at your local bank.

Do you qualify?

• 
  Time in business
  1+ years
• 
  Annual revenue
  $75K+
• 
  Credit score
  540+

Is a short-term commercial loan right for you?

If an unexpected expense puts you in need of capital, short-term loans may be right for you. Commercial loan lenders are less critical of applicants thanks to the abbreviated terms and lower amounts, resulting in higher acceptance rates and faster approvals.

Consider one today if:

• You need short-term funding for your next project
• Your bad credit history disqualifies you from long-term commercial loans
• You need a quick turnaround

Business term loan

Business term loans are given to commercial companies as a lump sum and they’re repaid over 1 to 5 years. They’re best used to finance large projects like equipment purchases and commercial real estate.

Qualified candidates will find that interest rates aren’t too far off the best commercial bank loans, starting at 7%.

Unlike banks that can take months, Fast Capital 360 can give you options from some of the best commercial loan lenders in as little as 1 business day.

Key considerations:

• Funding amount: Up to $250k
• Interest rate: As low as 7%
• Term: 1-5 years
• Time to funding: As fast as 1 day

Qualifications

Because long-term commercial financing involves more money and longer terms, lenders have stricter qualification requirements. If you have bad credit or lower revenues, you may need to pursue another commercial loan option.

Do you qualify?

• 
  Time in business
  1+ years
• 
  Annual revenue
  $200K+
• 
  Credit score
  600+

Is a term loan right for you?

If you’re planning a costly new project for your business, term loans may be right for you. Although they’re harder to qualify for, the longer, predictable repayment structure and lower interest rates make them ideal for qualified borrowers.

Consider one today if:

• You’re planning to buy expensive equipment or real estate
• You prefer a long commercial loan term repayment period

SBA loans

SBA loans are partially guaranteed by the Small Business Administration (SBA). As a result, lenders face less risk of default and thus, open up access to financing opportunities for more businesses.

SBA loans offer some of the most favorable commercial loan rates and terms on the market. But working with the government does take time. You may have to wait 3 to 4 weeks to receive funding.

Key considerations:

• Funding amount: Up to $5 million
• Interest rate: Starting at 6.25%
• Term: 5-25 years
• Time to funding: 7 days after approval

Qualifications

SBA lenders will only extend capital to small businesses they deem ‘financially fit’ making it more difficult to qualify.

Do you qualify?

• 
  Time in business
  2+ years
• 
  Annual revenue
  $50K+
• 
  Credit score
  650+

Is an SBA loan right for you?

Low interest rates and long commercial loan terms are the hallmarks of SBA financing, making it an attractive option to small business owners. But they’re not for everyone.

Consider an SBA loan if:

• You’re not in a hurry
• You have good credit, but don’t qualify for a conventional commercial bank loan
• You care about costs

Equipment financing

Equipment financing gets you the capital you need to lease or purchase equipment for your small business.
Since the equipment itself is used as collateral to secure the loan, you can finance up to 100% of the purchase price and pay for it over the life of the term.

Key considerations:

• Funding amount: Up to 100% of equipment cost
• Interest rate: Starting at 8%
• Term: 1-5 years
• Time to funding: As fast as 2 days

Qualifications

Compared to short-term loans and alternative forms of funding, equipment financing has tougher qualification requirements.

Do you qualify?

• 
  Time in business
  2+ years
• 
  Annual revenue
  $160k+
• 
  Credit score
  620+

Is equipment financing right for you?

When you have a need to purchase or upgrade equipment, this is the right type of commercial financing for you.

Consider equipment financing if:

• You need quick access to funding to purchase or replace outdated or damaged equipment
• You can’t afford to pay for the equipment outright

Business line of credit

With a revolving business line of credit, you’ll have a pool of funds to draw from on an as-needed basis. Much like your business credit card, you only pay interest on what you withdraw.

Key considerations:

• Funding amount: Up to $250K
• Interest rate: Starting at 8%
• Term: 6 months – 2 years
• Time to funding: As fast as 1 day

Qualifications

The flexibility of a business line of credit means they’re a bit harder to qualify for. You’ll need to have strong sales and a fair credit score to be considered.

Do you qualify?

• 
  Time in business
  1+ years
• 
  Annual revenue
  $200K+
• 
  Credit score
  560+

Is a business line of credit right for you?

If you want to get a commercial loan that you can use for any ongoing working capital needs, a business line of credit is right for you.

Consider obtaining a business line of credit if:

• Your need for funding is open-ended
• Project costs could exceed your original estimates

Merchant cash advance

A merchant cash advance (MCA) is a sum of capital that is borrowed against a business’s future sales. This means that, unlike types of commercial loans that are paid through installments, payments are drawn from the lender either by credit card holdbacks or daily ACH payments.

Also, MCAs use factor rates to determine the payback amount. This means you’ll have to pay the total amount agreed at signing, even if you pay off the amount early.

Key considerations:

• Funding amount: Up to $500k
• Factor rate: Starting at 1.10
• Term: 3-24 months
• Time to funding: As fast as same day

Qualifications

Merchant cash advances have lower qualification requirements than most commercial funding options. This allows small business owners who may not have a long or positive credit history the chance to grow their business.

Do you qualify?

• 
  Time in business
  4+ months
• 
  Annual revenue
  $100,000K+
• 
  Credit score
  500+

Is a merchant cash advance right for you?

If you need to fill an urgent need, merchant cash advances are for you. With an MCA, you can get cash fast to address any emergency.

Consider an MCA if:

• You need funding today
• There is an emergency that requires working capital
• You have trouble qualifying for other bad credit commercial loan options

A commercial loan is any type of debt financing issued to a business. Commercial loans come in many forms with unique repayment structures. They all serve a unified purpose: to provide funding for all things small business.

In fact, options once considered “alternative” are now more widely adopted and, many times, the first choice for business owners looking to secure commercial financing.