Funding Options Through Commerce Banking - Attention Business Owners!

Commerce banking is another term for business banking that is designed to meet the needs of business owners. The professionals that work for a commerce bank understand the needs of businesses and attempt to match them with appropriate products and services. The commerce bank earns money by providing loans and other funding options in order for businesses to expand, meet payroll and acquire equipment.

As a business owner, you should be aware of the funding options available through a commerce bank. These include business loans, lines of credit and collateral loans for equipment and buildings.

Business Loans
A business loan is the most common form of funding that a business acquires from a commerce bank. Business loan are sought during all phases of a business, from start-up. to growth and provide the business with instant capital to meet its needs. A business loan provides the business with money to buy a building or hire employees and expand into new marketplaces.

Business loans provide the business with quick capital to meet their current needs. Loans free up other capital and assets of the business, which can be used for other purposes.

The loan has to be paid back in time with interest. They are also subject to qualification and possibly collateral requirements depending on the type of business.

Business Credit Lines
Many types of businesses use business credit lines as a way to meet short-term needs. They provide gap funding for such things as account payables, payroll, rent and other bills that must be paid in order for the business to survive. The credit line is typically secured by the business’s future income or receivables and tends to be paid back within 30 to 60 days.

Business credit lines provide a float for the business in order to pay bills or make investments while waiting to be paid. They also relieve the business of any burdens associated with meeting its obligations.

A business credit line is a loan that is subject to the credit qualifications of the business. When paid back the business also pays back any interest and other fees that may be assessed on the loan.

Collateral Loans
A collateral loan is used by certain types of businesses to fund the acquisition of equipment or plants and buildings. The loan provides and amount that purchases the asset, which is used to collateralize the loan. Companies such as railroads, airlines and utilities use various forms of these loans to purchase rail cars, airplanes and plants used to generate power.

Collateral loans provide large capital amounts necessary for certain businesses to acquire the equipment and space they need to operate.  The loan is secured by the equipment or building that is held in trust and can be called or sold if the business defaults on the loan.