Nowadays startup companies want to grow their business and big companies want to expand their business and they need funding for this. So, the best option to fund their expansion is commercial and industrial loans. It is because money lending is very important especially for the small and startup business as they are not able to fund for their investments.
Commercial and industrial loans are generally used for working capital and the money lenders are helping the companies in buying equipment that are required for the startup and for the expansion.
You may need some guarantees to get this loan:
- Collateral: These are mainly given for security purpose if you take the loan. If you have taken the loan by giving asset then it is more secure and the interest rates will also be reduced. If borrowers are unable to pay the loan due to some reason they can sell some part of the collateral to the borrowers. The collateral amount basically depends on the amount of the loan.
- Personal guarantees: Suppose you want take a loan to start a company but at that time you may not have collateral to summit to take the loan in that case they can find a person who can take the personal guarantee on your behalf.
- Co-signer: You can also take the loan by having mutual understanding with someone and that person will have to co-sign your commercial and industrial loan. The most important thing in this case is the person who had co-signed the loan should have business or personal assets to summit it as collateral.
- Documents and application: To take this loan, you should have a complete package of all the documents that are required. You will have to show the business so that you may get the required amount and it will help them to understand how you are going to repay the loan. If you want to expand your business then you will have to show the financial statement of the business you are running so that they can see your performance.