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What is a commercial loan?

 

 

 

Commercial loans explained

 

The definition of a commercial loan may be confusing as it can differ depending on each bank or lender. Most commonly it can be defined as one of the following:

  • higher value business loans (in excess of $1 million)
  • loans for purchasing commercial property / real estate
  • general business loans (ie. loans with commercial intent)

At OnDeck our short term business loans are sometimes referred to in the market as commercial loans. The loans are often purposed for hiring staff, buying equipment, for expenditures that your company may otherwise not be able to afford and many other opportunities. 

 

 

 

 

What’s a commercial loan used for?

 

 

 

Why might you need a loan?

It seems like a pretty straightforward question, but it’s very important to have a specific plan for your funds.

OnDeck’s small business loans are typically used for hiring new staff, business expansions, purchasing new fit outs and equipment. They do not include high value loans nor loans for purchasing commercial properties. Our small business loans are intended to aid in improving and expanding your current business whilst bringing a valuable impact to the bottom line. 

Having adequate cash flow is also necessary for business opportunities like franchising or exporting. Hiring an agency to help with marketing/advertising can also be costly endeavours and a necessary cost for expanding your brand reach. Some common circumstances that might require a commercial loan also include:

 

Opportunities to expand

Whether it’s adding an outdoor seating area or leasing a larger space, physical expansion can help accommodate the growth of your business. Purchasing new stock and keeping up to date with new trends also make up a considerable expense in expanding your business. The opportunity to expand can make it possible to secure more customers and generate more income. However, the added expense might be something you hadn’t anticipated. As a result, quick access to capital can help you pull it all together and take advantage of an opportunity for expansion.

Employees

Hiring new employees is often essential to sustaining growth. From training to salaries, employees can be an expensive addition to your business. When hiring new employees, it’s important you have adequate cash flow to cover the associated costs.

Maintenance Issues

The same way you might need to call the plumber occasionally to your house, you might have maintenance issues at your business premises. Water leaks, electricity or drainage issues are all factors you might not have accounted for when calculating your budget. You likely won’t have the time to wait around while the banks process your application to only fund you weeks, if not months, later. Therefore, fast funding from an online lender is a great alternative.

 

 

Find out how much funding you could get for your business

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How does a commercial loan work?

 

With loans from $10,000-$250,000 over 6-24 month terms, you can apply for an OnDeck short term business loan in less than 10 minutes. If you’re approved, you could have your funds in as fast as one business day. This means less time spent searching for finance, and more time focusing on running your business.

OnDeck do not take security against your loan, however we do require a personal guarantee.  To be eligible, you’ll need at least $100,000 in annual turnover, have 3 monthly deposits at a minimum, have no prior or current bankruptcy and have a business credit score of at least 500.

We offer weekly, or daily, repayment options for your loan.  If you choose daily repayments, your first repayment will be due the following day. If you choose weekly repayments, you first repayment will be due 7 days after receiving the funds.

  • Apply now

    Click on the 'Get Started' button or call us on 1800 676 652

  • Get Approved

    Conditional approval is usually granted within 1 business day and your loan specialist will be available at all times

  • Get Funded

    Funding is available within 24 hours of your approval, so you can get the funds you need fast!

 

 

How to secure a commercial loan?

 

In order to be eligible for OnDeck’s commercial loan, you’ll need a minimum annual turnover of $100,000, 3 months of bank deposits and a business credit score of at least 500.

We look at the credit profile of your business – which you can easily check for free here. Our business credit checker ‘Know Your Score’ is free and immediate, and there is no obligation to take a loan once you’ve received your score. Simply fill in your business details and your score will be provided, there and then, by Equifax.

Knowing your business credit score is important as it’s one of the key indicators when assessing the risk of lending to your business.

 

 

Already know your business credit score and ready to unlock opportunities?

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Alternative types of loans

 

Business owners have a number of alternative financing options available in the market, with a number of examples like:

 

Credit cards

Business credit cards work like personal credit cards in that they are easy and convenient to use. Most business credit cards will charge higher annual fee, whilst some personal credit cards do not charge an annual fee at all. Business credit cards can be expensive to maintain over time because the interest rates tend to range in similar ranges to personal credit cards.

Business line of credit

Business lines of credit allow you to have an agreed overdraft limit. You only pay interest when you borrow, and there tends to be low account fees. Lines of credits may be either secured or unsecured depending on the financial institution and this product can be withdrawn by the lender at any time. Which means you may have to repay what you have borrowed at a financially inconvenient time.

Short term business loans

Short term business loans are fast and straightforward to apply for. At OnDeck, we offer our security free loan, requiring instead a personal guarantee. Our application process may be easily completed online in 10 minutes and if approved, funds will be available in your bank account in as fast as one business day. We offer terms from 6 -24 months on loans of up to $250,000.

Learn more about OnDeck’s short term business loans here

FAQs

Commercial loans are financing options from banks and lenders which assist businesses with obtaining capital to fund their operations.

They are practical funding solutions for managing cashflow, hiring staff, purchasing equipment or facilitating operations.

We don’t require that you put down any assets for a short term business loan, all we require is a personal guarantee.

We do not have business loans for purchasing commercial property.

Our short term business loan amounts are anywhere from 10,000 to 250,000 depending on your business eligibility.

The interest rates are determined according to several factors. To find out what we can offer your business, give our loan specialists a call on 1800 676 652 or click here to learn more.

Interest on repayments are fixed.

Yes, we do not take security over your assets. All we require is a personal guarantee.

To qualify your business must:

  • make a minimum gross annual turnover of $100,000
  • be in business for at least 1 year
  • have 3 months of bank statements
  • no prior or recent bankruptcy
  • minimum business score of 500.

Our loan terms are from 6 – 24 months.