Retain Ownership. Instead of raising funds
by selling an interest in your company to an investor, you retain
the current ownership of your company. The lender is only entitled
to an interest return on its commercial loan, not a percentage of the profits
or a share in the company that an investor would expect.
Financial Flexibility. The proceeds from
the commercial loan can be used for almost any purpose including paying
off current debt to avoid higher interest rates, short repayment
term, or pending balloon payment. A loan for commercial use also allows you to
preserve your cash and working capital.
Better Cash Flow. A loan gives you access
to capital with minimal up-front payments and the flexibility
to design a loan schedule that suits your needs. You can organize
your loan schedule to match your payments with the projected
cash flows from the proceeds of the funds this will help you
minimise the drain on your working capital.
Borrower is legal owner of equipment. If
you decided to take a commercial loan against your equipment, unlike some
other forms of financing you remain the legal owner of the equipment.
Maximize Financial Leverage. Normally you
can use your refinance most of your assets, real estate, commercial
equipment and vehicles and by arranging your commercial finance may free up
cash flow for other pressing needs.
Simplified cash flow management. Loan schedules
are preset, making cash management more predictable.
Tax advantage. Interest payments on your
loan are tax deductible and are made with pre-tax money. Purchases
financed with profits, in contrast, are made with after-tax money
