4 Ways A Commercial Loan Can Help
July 16, 2019
Michael T. Luna, President and CEO of Texas Wilson Office Furniture & Services Inc. on finding the right banking partner.
Vice President, Commercial Banking Relationship Manager
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For any established company looking to grow, seeing and seizing opportunities is key to long-term growth. Knowing the right time to bring your business to the next level can be difficult to pinpoint, but there are milestones reached that may indicate your company’s readiness to expand. If you are thinking about the following, then it’s strategic to consider incremental funding:
- expanding locations
- increasing your inventory
- building your cash flow
- financing new equipment
Jerrod Stallings, a VP in commercial banking at The Bank of San Antonio, offers useful insight into who a commercial loan is ideal for:
“The ideal candidate for a commercial loan is generally a seasoned business with a successful track record of managing through the ups and downs of their particular industry. The candidate has a clean, profitable financial history with a strong collateral position to secure the loan. It’s important to get to know the growth plans of the business, and work together to develop strategies to achieve them.”
Did you know that a commercial loan can help in the following four ways?
1) Power expansion and real estate purchase
Perhaps your team has outgrown your current workspace. Or, perhaps you're ready to find a larger retail space to grow your business. Both situations are positive signs that your business is thriving, which means it’s probably time to consider expanding.
Securing financing with a commercial loan will allow you to fund that move, to branch out and enter the next phase of strategic growth.
2) Increase your inventory
Struggling to keep up with customer demand is a sure sign that your company should increase inventory and capacity, and a commercial loan can help. However, failing to meet customer needs could prove detrimental to your business and cap potential momentum.
By carefully calculating the debt to sales, you may discover that incurring some debt to secure more inventory will benefit your bottom line. Additionally, commercial loan funds can also help you expand your existing products and services.
When approaching potential banks seeking credit, it’s important for an established business to find a banking partnership built on mutual trust. One San Antonio business owner, Michael Luna, President and CEO of Texas Wilson Office Furniture & Services Inc. said finding the right banking partner is vital.
“You're going to need to know that you need a good bank to back you up because when there's those big orders that come in and you don't have the cash and you don't have a bank that believes in you, you're going to have a problem.”
3) Provide cash flow and working capital
A commercial loan can provide the cash flow necessary to bridge any financial gaps, as well as increase your working capital, and incremental resources can help scale your business. This can result in increased revenue and growth so that you can pay off the original commercial loan as well.
4) Gain and leverage new equipment, tools, and tech
Whatever your business, you probably require some equipment, tools, or technology, to operate. Not only will you have access to the equipment or new technology, you will build business credit over time, which in turn will increase the credit-worthiness of your business.
Whenever an opportunity for your business arises, it’s important to make the most of it. A commercial loan can be that assistance you need when you’re ready to grow, allowing you to overcome obstacles and properly fund your most important initiatives.
Luna offers this advice on finding the right partner when starting a business or raising capital for a growing business:
"It's great when you have a banker that understands you and your products and they believe in you.”
We offer personalized coaching to help you discover financial solutions that can power your business. Find out what solution works best for your business by emailing Jerrod Stallings at [email protected].