Understanding Different Types of Business Loans

By Banesco Team
Published on July 10, 2019

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Businesses may from time to time require cash and capital to fund a variety of expenses, operational changes and investments. As such, companies often take out business loans to satisfy these needs. A business loan is a debt that the company owes to the bank they partnered with and will need to be paid according to the loan’s terms. 

Companies use business loans for a variety of needs like paying salaries, buying office supplies and inventory or developing business projects. In order to get started the bank needs to understand how the business will use the funds provided and the debtor must create a plan to explain how the money will be spent.

There are many different loan options to choose from. Traditional banks have been the most popular choice of funding; however, applying for a business loan at a ‘big’ bank’ can have its setbacks. When applying for a business loan at Banesco USA you will be pleased to hear that our loan process is made and decided locally—in person. 

Our local decision-making feature facilitates the loan application process for business owners. From the first initial consultation to reviewing and approving the application, we take care of it all whether at our Coral Gables, Doral, Hialeah, Weston or upcoming Aventura branch. 

Loans, of course, are repaid with an added interest rate. Banks charge different interest rates for loans depending on the terms and conditions under which they are signed. 

An important difference to understand is whether the interest is fixed or variable. A fixed rate means the interest rate will remain the same for the duration of the loan. A variable rate means that the interest rate can fluctuate based on different circumstances.

At Banesco USA we offer long term fixed rates, meaning the interest rate will remain the same for the full payback period and at the same time offering longer payback periods than usual. 

The Bank’s approach to underwriting commercial credit risk is to evaluate each loan request on a case by case basis, the bank will seek to analyze the overall soundness of each loan proposal based on traditional credit underwriting criteria. 

Banesco USA is proud to offer multiple business loans to support its beloved community. Our most popular loans are:

Income Producing Commercial Real Estate Loans

A commercial real estate mortgage is a real estate secured loan mostly used to purchase or renovate a commercial property. Including:

1. Multifamily (apartment buildings, combined duplex/triplex/fourplex buildings, non-conforming apartment buildings)

2. Retail (Unanchored shopping/retail centers, anchored shopping/retail centers, retail properties for owner-users, single Rated tenant      property)

3. Warehouses (multi-tenant warehouses, warehouses for owner-users, light Industrial properties, warehouses/showrooms

4. Offices (Multi-tenant office buildings, single-tenant office buildings, office/showrooms, office buildings for owner/users)

As a local lender, Banesco USA understands the commercial real estate market in South Florida. We have the lending capabilities, flexibility, and local decision makers here to help you achieve your goals.

Owner Occupied Commercial Real Estate Loans

An owner-occupied commercial real estate loan is used to buy your commercial space for your business. If you are a business owner looking to own your existing or a new commercial building for your company, this may be the right loan for you. 

According to the SBA (U.S. Small Business Administration) for lending purposes, a property is considered owner-occupied when 51 percent or more of the property’s space is occupied by the owner’s business, and the owner pays at least 51 percent of the rent.

Commercial and Industrial Loans

One type of commercial and industrial loans is a line of credit. For example, if you own a landscaping business, and you need to buy trucks- we would finance the trucks, and this would be called equipment financing. This type of credit will allow you to buy the equipment necessary to operate your business whether it’s machinery, transportation or products. Another option would be for cash flow purposes, and we would provide the line of credit in order to allow you to operate your business. Whether you’re looking to expand your business or purchase new equipment, we’ll help you find a solution that fits your needs. 

Banesco USA believes in giving companies the best possible chance at success. Loans are in high demand, but not every company that applies for one will get it approved. That’s the nature of lending. At Banesco USA we promise to carefully evaluate all aspects of your loan application. We strive to deliver innovative, responsible, and quality service to our customers in our community.

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If you’re interested in a business loan, you can reach one of our experienced personal bankers by calling +1 (888) 228-1597, or by visiting one of our convenient branch locations.