| Commercial loans are defined as loans provided to | | | | other. Depending on the organization the approval time |
| companies or small businesses to meet business and | | | | can be anything between 1 day to a month, however |
| operating expenses, since commercial loans are a | | | | most decisions are usually taken within one week of |
| transaction that involve high cash transfer and require | | | | the final package being submitted to the underwriter or |
| more often than not certain collateral be put down | | | | loan committee. |
| against the loan, getting a commercial loan can be quite | | | | If your loan is approved, the organization will then have |
| a challenging task. Almost all banks in Australia offer | | | | you sign a contract, or agreement, which will clearly |
| commercial loans, and in addition to banks there are | | | | mention what property or properties have been put up |
| also firms that can either help you get a commercial | | | | as collateral, what are the transaction fees involved, |
| loan, or offer commercial loans independently. | | | | and what will the interest rate. Once the agreement is |
| Applying for a commercial loan is not as simple as | | | | signed, there is usually a transfer of funds to the |
| applying for a personal loan, as there are a lot of | | | | account of choice, or you can get a cheque from |
| parameters that are involved before any bank or | | | | financial organization you are dealing with. So far what |
| financial organization approves a commercial loan, | | | | we has been discussed is just the framework of how |
| understand the way a commercial loan is processed | | | | all commercial loans operate. |
| often helps in improving your chances of getting a | | | | Depending on the amount of the loan and the collateral |
| commercial loan. | | | | involved, a loan can sometimes go through both an |
| Once a business plan or proposal is submitted to a | | | | underwriter and a loan committee before it is |
| bank or financial organization, the organization assigns | | | | approved. Although such cases are rare, but you |
| the case to a loan officer, the loan officer then | | | | should be prepared for a delay if you find out that the |
| analyses the business proposal and does a back | | | | loan is actually being scrutinized as mentioned above. |
| ground check on the company, if you are starting a | | | | How to improve your chances of getting a commercial |
| company from ground up then you will have to show | | | | loan |
| collateral against the loan, the loan officer then verifies | | | | A majority of commercial loans are rejected because |
| the collateral and assess the value of the collateral | | | | there is just not enough paper work to support the |
| involved. In addition if there are any additional | | | | claims made, this means that instead of actually going |
| transactions involved, like a proposal to buy property or | | | | out and spending money on impressive proposal |
| to set up a an office, then the loan officer might ask | | | | writers, the first thing you need to do is get all your |
| you to submit additional documentation like the blue | | | | paperwork in order, as mentioned earlier the loan |
| print of the proposed office, or an estimate from a real | | | | officer's task is pretty simple, his job is to verify |
| estate agent, clearly mentioning the proposed pricing of | | | | everything you claim is true, from the collateral being |
| the land to be purchased. | | | | offered, to the various pricing involved. To make his |
| Once all the paperwork is ready, the loan writer then | | | | job simpler (usually loan officers are working on multiple |
| submits the entire package to an underwriter or a loan | | | | loans at the same time) you can go ahead and get all |
| committee, the loan committee then presents you with | | | | the necessary paperwork done in advance, this will |
| a letter of intent, that makes sure that all parties | | | | speed up the loan process, and will also put you in |
| involved are on level ground and understand each | | | | better standing with the loan organization. |