Commercial Finance Companies

Commercial finance companies provide business loans rather than consumer loans. A small business's primary use of a commercial finance company is to borrow money for the purchase of inventory and equipment. These financiers can be a useful resource, particularly if your business has adequate collateral available to support a loan. Commercial finance companies usually do a great deal of accounts receivable and inventory financing. Small businesses involved in manufacturing or wholesaling may be most interested because they tend to need to be highly collateralized.

Because commercial finance companies typically offer only loans secured by commercial assets, these institutions are used primarily by established businesses, not startups. As with consumer finance companies, the higher cost of borrowing from a commercial finance company may make this type of lender appealing only after a loan application has been denied by a bank.

Advantages of a commercial finance company are:

Disadvantages of commercial finance companies: