Top 3 Reasons Small & Medium Businesses Should Consider Commercial & Industrial Loans

Now more than ever, it is vital for business owners to understand commercial financing and the ways in which their local, community bank may be of assistance. Increasing demand is great for owners of small to medium size businesses as long as they have the capital to hire enough people and bolster up their inventory levels to satisfy such demand. The availability of financing can change based on market uncertainty, local competitive forces, and broader factors such as inflation and rising interest rates.  

Commercial and Industrial Loans (C&I) are comprised of loans that are issued for business purposes. These loans are made directly to businesses that provide funds for short-term working capital requirements, capital expenditures, expansion of product lines, or refinancing of existing company debt. A commercial mortgage used to finance the Owner Occupied Commercial Real Estate used for business operations also falls under the umbrella of Commercial and Industrial Loans. 

Businesses need financing, or access to capital to realize operating and growth goals, and C&I loans are an optimal way to fund these needs.

Most C&I loans are short-term and are collateralized by business assets (aside from real estate) such as Accounts Receivable, Inventory, Cash, Machinery & Equipment, and other fixed assets.

Some of the benefits of C&I Loans are as follows:

Competitive Interest Rates: C&I loan rates are typically tied to the Wall Street Journal Prime Rate index plus a spread depending upon the strength of the borrower and the structure of the loan. They usually offer the lowest rates of all loan options allowing the business to access critical funding while managing overhead costs.

Flexibility: C&I loans are flexible in that they are tailored and customized to businesses in different industries with unique needs. They also offer more negotiable options of renewability, pay down the loan more rapidly, or to use the proceeds for very specific purposes.

Long-Term Repayment: C&I loans used for permanent working capital or fixed asset financing may have extended repayment terms which can assist businesses in managing their cash flow by making payments over a longer time.     

C&I loans are not the only way businesses can raise capital or receive financing, but they are one of the more accessible options offered by community banks. Community banks such as Kearny Bank employ a team of experienced commercial relationship bankers who work directly with business owners to fully understand their operations and provide tailored solutions to their financing needs. Market and industry knowledge along with professional experience help us to delight our clients with each and every opportunity.

If your business could use financing to support growth, I would love to speak with you about how Kearny Bank can help your business succeed.  Email me today or call at 973.244.4027.

By Robert Melchionne, SVP | Director of C&I Lending

About Robert:

Robert Melchionne is SVP, Director of C&I Lending at Kearny Bank, where he leads a team of commercial and industrial lending professionals. Together, they provide commercial credit facilities to privately held businesses in need of debt capital in order to grow and expand their businesses. In a banking career of over 25 years, Robert has experience in providing commercial credit facilities to borrowers with needs such as short-term and long-term working capital, term debt financing for fixed asset expansion, business acquisition, commercial mortgages for real property, and international trade finance services for import and export companies.

Robert earned his bachelor’s degree in business administration/economics from Montclair State University. He also holds an MBA from Caldwell University.

To learn more about Kearny Bank’s C&I Lending capabilities, contact Robert.