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If you have ever financed your home or a car, you might think you have a good grasp of the world of finance. Alas, there is a definite difference between personal loans and commercial finance. Consider these commercial loan options.

Business credit lines are similar to home equity lines in some ways. The primary difference is their use. Business credit lines are used to cover cash flow strains caused by delays between revenues coming in and bills being paid by the company.

Factoring is a financing option designed to deal with cash flow problems. You sell your receivables for a discount to a lender in exchange for immediate payment. While factoring is good for cash flow, it is an expensive option.

If you own it, you have cache in commercial financing. Lenders will loan a business money based on the assets held. Known by the obvious name of the Asset Based loan, the loan is secured by a security interest.

Hard money loans are often used by businesses to buy time. They are expensive with most of the cost coming in points paid on the borrowed amount. Still, a hard money loan can give a business an extra month or two to make ends meet and resolve cash flow issues.

Equipment loans are unique to the world of business. As the name suggests, these loans are made as a percentage of the total value of the equipment. Depending on the equipment, the percentage can be between 60 and 80 of the total value.

Commercial real estate loans are massively different than personal real estate loans. Lenders will make long term loans, but most are fairly static in regard to the terms. You are also only going to be able to borrow 75 percent of the total value of the property.

You are a manufacturer and need new manufacturing equipment. A capital term loan is probably your best option. The loan takes into account the cost of the equipment, the useful life of it and the overall condition of the finances of the business.

One of the other large elements of business financing that you will not find in the personal finance world is the lending providers. Private financing is common. Investors will pool money to look for opportunities, so always investigate this option.

In general, commercial financing is much more involved than getting a personal loan. You can expect the lending source to ask for a lot of paperwork including everything from balance sheets to cash flow statements to personal credit reports. Prepare yourself accordingly.