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Learning More About Savings

Hello, I’m Miranda West. I would like to use this site to help others build an adequate savings account. Most people do not have enough money in their savings accounts to cover emergency repairs or other expenses that unexpectedly arise. Without a savings account, you may be at the mercy of your employer, which can have a negative effect on upward mobility. I will cover popular savings techniques you can use to start building your nest egg. I will also talk about ways to reduce spending so you can dedicate more to your savings. Thank you for coming to my website.


Learning More About Savings

Commercial Loans, Balloon Payments & More | Common Curiosities

by Ralph Ford

Just like individuals, businesses run into financial situations when they have to turn to lenders for a little monetary help in the form of a loan. There are multiple loan products designed for businesses and business owners, and one of those is a commercial loan. Commercial loans can be incredibly advantageous for business owners in certain situations. Take a look at some of the common curiosities about commercial loans and the answers you should know as a business owner looking at your loan options.

Is it true a commercial loan is harder to get than other loans?

Commercial loans can be a little more difficult to get for some businesses. A lot of whether or not you will be approved for the loan will rely on how much debt your business already carries. For example, if you have a large working capital loan that eats into your profit margin because of substantial payment requirements, a lender may see a commercial loan in addition to that as a risky investment on their part. While payments with commercial loans can be quite small, they are also usually shorter in term because they often involve a balloon payment toward the end of the term. 

What is a balloon payment?

A balloon payment is basically a lump sum payment that comes due toward the end of a loan. A lot of institutions that offer commercial loans to businesses require balloon payments in this fashion. You will make regular interest payments on the loan for a certain number of years, and then the rest of the money that was borrowed will be required to be paid back in full later on. The advantage of balloon payments is you will get the money you need for your business and smaller monthly payments for the term of the loan. This can be really helpful if you needed a commercial loan because you had higher-than-usual expenses or your business was in a financial bind. 

Are commercial loans for business startups?

Not necessarily. Most commercial loans are designed for businesses that are already established and bringing in some kind of revenue. Most startup owners go after a regular business loan to get their business started, but this business loan is usually granted to the individual with the business name attached. Commercial loans are specifically money loaned to the business entity, which may not be already established with a startup.