Commercial lending practices make business borrowing a costly proposition

Commercial lending guidelines are so tight, it is difficult or impossible to get a small business loan from a commercial lender. Even if lending guidelines weren't so tight, commercial lending practices makes business borrowing a costly proposition in terms of high down payments, high interest rates and restrictive terms.

Typically, a business loan from a commercial lender requires a minimum of a 25% down payment. The interest rates charged for these types of loans are expensive and the terms are short, usually maxing out at 15 years. While this is a great scenario for the lender, it makes it very difficult for the borrower to service the debt. The initial down payment removes too much working capital from the small business owner's cash reserves and the short loan duration makes the loan too expensive on a monthly basis. Both conditions noted above have an adverse effect on a small business's working capital, slowing the growth of their business.

The reality is that it is very difficult to obtain funding; the result is that companies are not getting the capital they need to buy equipment, plants, and buildings or restructure debt through this channel at this moment.

Royce Joseph Capital has a better solution, a more intelligent solution to business funding. See why Royce Joseph Capital has a more intelligent solution to funding small business growth and expansion. (read more)