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Commercial financing, types of commercial financing and where to get help

Commercial financing is an all-encompassing term for various finance products which are designed to help businesses thrive. In the most common sense, commercial financing is used to define a situation where a business puts up its assets that are used to run its operations as collateral for loans.

It is almost impossible to expand and grow businesses without taking loans in this current day and age it is therefore important for business owners to understand this term and its types so they can make the right choices on which type of commercial financing would be most suitable for their businesses.

In this post we will look at the different types of commercial financing that exist in terms of periods of payback allowed. We will also categorize them all into two major groups which will be explained in brief details. Read on to learn more.
Types of Commercial Financing

In this post we will look at the different types of commercial financing that exist in terms of periods of payback allowed. We will also categorize them all into two major groups which will be explained in brief details. Read on to learn more.

Types of Commercial Financing

In addition to the popular asset-based explained above, there are multiple options available for commercial funding. Most commercial funding plans are alike with private loan systems. For example, the homeowner’s loan is structured pretty much the same way as the commercial mortgage while the case is same for business loans and personal loans.

In terms of allowance period, we have short-term loans, medium term, and long-term loans. Under the short term, we have the Overdrafts, Business credit cards, Trade credit, Invoice factoring, and Invoice Discounting. Now coming under the medium term we have Bridging finance, Crowd funding, Peer-to-peer lending, Equipment leasing, while the Long-term group consists of Commercial mortgages, Business loans, and Asset-based lending.

The two major groups mentioned earlier are Debt Financing and Equity Financing.

Debt financing is the major form of funding used by a lot of people. This process involves a business owner who lends money in form of a loan to be paid back at a certain date in the future and at a particular interest rate. The lenders here may be banks, individuals or other financial institutions like insurance companies.

Equity Financing is when the lender of the money turns the money into an investment in which he does not wish to be paid back in cash but in shares in the company’s equity. This makes him have a say in the running of the business and of course shares in the profit. Private investors or venture capitalists are major sources of such funds. A family member or friend may decide to buy in ownership shares if they see an admirable growth pattern that requires their money as capital.

How do you determine what option is best for your business?

Every business owner is eligible for a commercial loan but knowing the right choice for your business usually requires consideration of many factors.

Generally most business owners like to keep their profit sharing to the minimum number of people while others like to stay in control of their business this makes debt financing very popular. But it is not always the right choice for every business. It is wise to employ the services of Finance Brokers in Mt. Waverley or Glen Waverley

If you are a business owner in Australia with the need for commercial loans then contact Opulent Finance today. We have qualified Commercial Finance Brokers in Melbourne, Mt. Waverley and Glen Waverley who are ready to get you the best deal that is just right for your business.

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Siraj Ahmed
Siraj Ahmed
2020-11-18
Verified review
Excellent service. Got us a great loan option and also worked with the bank to get the loan approved during the heights of COVID.
Dhruv Satra
Dhruv Satra
2020-11-18
Verified review
Malaka Ekanayake
Malaka Ekanayake
2020-11-10
Verified review
We have had a very pleasant experience working with Opulent Finance. We did not have that much experience with house loans as we were first home buyers but working with Opulent  Finance team specially with Ishara, made that experience stress free one. She helped us secure an incredibly competitive interest rate and offered her guidance so we can take advantage of the future interest rate drop. Thank you Ishara, Dayan and team for your incredible support and we have no hesitation what so ever in recommending Opulent Finance for your financial needs
Uma Gunaratne
Uma Gunaratne
2020-11-04
Verified review
Ishara is highly knowledgeable and if you are a first home buyer and new to the intricacies of all that home loans entail, she will really take you under her wing and impart her knowledge and experience and treat you as one of her own. She is also extremely patient but will also be very truthful and upfront in situations which is honestly what you need. She did a very complicated loan for us, and was so incredible efficient and organised with all the paperwork that was required. Not only that, she helped us secure an incredibly competitive interest rate! Ishara has probably spent hours and hours explaining to me details and giving me really good guidance through this momentous period in life! During the cooling off period and settlement, she was constantly chasing up our loan and honestly took a personal interest in the outcome. Our solicitor was also very happy about working with Ishara as she was following the entire process, was always up to date and very easy to work with. Considering that our entire process happened during the covid-19 lock-down and work from home environment, we have nothing but good things to say about how professional Ishara was as she didn't let a single thing slip. We are so glad that we have both Ishara and Dayan in our corner. We will definitely be using them for all future financing needs. Thank you Ishara, Dayan and team!
Harsha Ill
Harsha Ill
2020-10-11
Verified review
Opulent Finance gave professional advice for my unique home loan requirement. They respond quickly with the proper information. The process was smooth and I felt comfortable to deal with the team. The team is friendly and professional to deal with. Highly recommended for any one looking for finance.
S P
S P
2020-09-22
Verified review
I have been dealing with Ishara at Opulent Finance for over 6 months now and she has been faultless. She has helped me secure a loan pre-approval in no time and assisted me with my property purchases. I could not recommend Ishara highly enough.
Afshin Koohestani
Afshin Koohestani
2020-09-22
Verified review
Good service and offers.
Janaka Kumara
Janaka Kumara
2020-08-22
Verified review
A big shout out to Dayan and his team for the seamless service provided during the refinancing process. Thoroughly professional team that pays attention to every detail and has been extremely transparent throughout the process. A team that always has the best interest of clients in mind and makes all efforts to provide the right advise and outcomes to the clients. Highly recommended!
Rakesh Mistry
Rakesh Mistry
2020-08-19
Verified review
They called me back with solution
Indra Jaya
Indra Jaya
2020-08-12
Verified review