One of the things people get wrong about commercial loans is how long it takes to set them up. Some types of business loans can be gotten in as little as a few days, while others can take up to 60 days or even longer.
A commercial real estate loan is the type of business loan that is most likely to take the most time to set up. Even if a commercial mortgage is changed as quickly as possible, it will still take 45 to 60 days (up to nine months is a possibility with some traditional banks for certain commercial mortgages). The need for a real estate appraisal is one reason why this type of commercial loan takes so long. This requirement alone takes 30–40 days out of the process of getting a commercial mortgage. In the case that could take up to nine months, there may be an environmental review and/or a business plan. Both of these add a lot of time and money to the process of getting commercial financing. But not all lenders will need an environmental review or a business plan, so business owners should find out ahead of time if they need these extra things.
A business cash advance based on future credit card sales is one of the quickest ways to get money for a business (credit card receivables). Credit card factoring is the name for this type of business financing that can be set up in just a few days and doesn't require much paperwork other than a copy of the credit card receipt. Like in the previous example, some lenders will need more proof, like tax returns and financial statements. Because of this, the time frame for these lenders is likely to be a few weeks instead of a few days.
In both of the above cases, the deadlines will be pushed back if the first attempt at getting a commercial loan doesn't work out. Business owners need to know that even though there are ways to get funding quickly and others that take more time, like commercial mortgages, there may still be problems that can't be solved and cause a commercial loan to be turned down. Even if a lender turns down a commercial loan, there are often other ways to get commercial financing. However, these "false starts" will make the process longer for the small business borrower.
In the end, the process of getting a commercial loan will go as quickly as possible if a business borrower does the following before looking for a loan:
- Figure out if they need long-term financing or short-term financing.
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