Businesses often need quick cash in order to operate. Applying for a loan, however, can be time consuming and without the help of a Commercial Loan broker, can often mean not being able to find a loan that is suitable for the borrower. A loan broker has the training to provide much-needed professional assistance to a business owner.

When you need a loan, you must first do some research and define exactly what you are looking for in a loan. Loans do not come “one size fits all.”

The most common types of loans are:

• Construction loans for both residential and commercial properties
• Loans to purchase improved real estate
• Loans to purchase equipment or commercial vehicles
• Working Capital loans for businesses
• Loans to refinance existing commercial or real estate debt

A serious lending institution will focus on a company's cash flow, credit profiles, and financial ratios to determine the appropriate level and debt repayment capability of the business. The Asset Conversion Cycle or Cash Cycle is an important analysis tool that allows the credit analyst to determine more easily why and when the business needs more cash to operate, and when and how it will be able to repay the cash. It is also used to distinguish between the customer's stated loan purpose and the borrowing cause.

The Asset Conversion Cycle represents the number of days it takes a company to purchase raw materials, convert them into finished goods, sell the finished product to a customer and receive payment from the customer for the product. Most lending institutions use traditional cash flow to determine the repayment capability of the borrower.

If you need more than $500,000 and haven't had luck with banks, try commercial Finance companies. They will usually take on higher risk loans than banks will. Keep in mind, however, that their Interest rates will also be 2% to 5% higher than banks' rates. They are a good choice if you see your loan needs increasing in the future, or if you have a high debt-to-worth ratio. In such cases they may be your only option.

A commercial loan broker acts as the middle man who helps guide you through the process of obtaining a commercial loan.

Benefits of using a commercial loan broker:

• A commercial loan broker educates you on the types of mortgages that meet your needs
• Will review your financial profile and counsel you on how to proceed
• Helps you prepare documents needed to apply for a loan
• A loan broker talks to loan officers on your behalf to anticipate and resolve any problems

Disadvantages of using a commercial loan broker:

• Origination fee can run as high as a few percent of a loan amount
• Selection of lenders may be limited
• Risk that the person you choose is incompetent or untrustworthy. Beware of misrepresented rates and hidden costs
• Some commercial loan brokers prefer lenders that treat them well, but don't necessarily offer the best rates

Such a broker will provide invaluable aid to a busy business owner, and will probably end up being well worth their fee. It’s especially important for large businesses to secure such aid, since the larger the business, the more difficult it is for the owner by himself to make sure every aspect of the business is well-taken care of. With the aid of a loan broker, you’ll know that your bases are at least covered regarding commercial loans.