Commercial Financing

Commercial financing is available to encourage responsible budgeting and enable businesses to overcome unanticipated hurdles like economic downfalls, unpaid invoices, and budgetary discrepancies. With the flexibility of commercial financing, your business can acquire new or used equipment, obtain capital, or set up a commercial line of credit.

Before you apply for commercial financing, it’s important to understand the expectations. Being prepared for the application process can help you maximize the benefits that accompany commercial financing. Approaching the commercial financing application process blindly may hinder your company’s ability to find financial solutions that facilitate growth opportunities. Utilize the strategies from these six tips to ensure you are properly equipped when you need to seek financing.


Applicants are required by the lender to have the appropriate paperwork regardless of the financing being requested. Conduct some research to find out what documents are needed before entering the commercial financing application process. Generally, the required paperwork consists of 3 to 5 years of budget records, tax statements, and any financial assessments performed by a third party. You can streamline the application process and get the financing you need faster when you have the necessary documentation readily available when filling out the application.


While institutional lenders might seem like a good fit for financing heavy equipment, a bank is not always the best choice when you’re looking to expand your fleet or acquire other industry-specific tools. Instead, consider a captive finance company—a wholly-owned subsidiary that finances retail purchases from the parent firm. Partnering with a captive finance company allows you to receive the financing solutions you need, plus the equipment expertise to guide your business to success.

Unlike a bank, which focuses primarily on lending money, a captive finance company is industry specific. Whether it’s construction, mining, agriculture, or oil and gas, their team typically has extensive experience in your market. Plus, you can trust that the financing solutions are designed to strategically align with the goals of your business.


Financial institutions offer a variety of financial solutions including loans, finance leases, operating leases, working capital, revolving lines of credit, and a commercial account. Be sure to carefully review and discuss the options with a representative and your team to determine the best solutions for your business.

Whether you’re seeking fast cash or trying to acquire new or used equipment, it’s important to identify the needs of your company before you apply for financing. Options like leasing equipment for a fixed period of time with the opportunity to purchase the equipment in full after a predetermined time or at the end of the contract are designed to give your business the flexibility to get the job done.


Companies that experience seasonal sales cycles should account for these sales periods when applying for financing. Incorporating financing options into your annual budget allocations can significantly impact the ability to stretch your money during the downtimes.

Additionally, a captive finance company has the flexibility to set up a payment schedule to accommodate your sales cycle. You can trust that their team is conscious of your business cycles, and can recommend the financing solutions to help make payment management easier.


Owning technology that is outdated can negatively impact your business by leading to increased maintenance costs, unexpected system downtime, and reduced productivity. Additionally, experiencing a security breach because of outdated technology can be catastrophic for a business. Plus, failing to effectively keep your technology current can propel your competitors that regularly upgrade their equipment ahead of your business.

Managing technological obsolescence can help reduce the burden that accompanies out-of-date equipment. Implement a financing strategy that manages technological obsolescence and ensures you’re working with the equipment and technology needed to promote success. In many cases, a captive finance company can develop a structured solution unique to your business by offering co-terminus contracts or facilitating equipment trade-ups that allow your firm to utilize the technology to retain its competitive advantage.


Partnering with a captive finance company is more than a commercial transaction. Banks have earned the reputation for approaching lending as just a transaction, whereas captive finance companies are generally known for creating a more personal experience by cultivating relationships with their customers. Lenders from captive finance companies tend to be more invested in your firm’s success and strive to find a two-sided solution that benefits both parties. The success of a captive finance company is dependent on the success of your business. So, it’s safe to assume that it’s in their best interest to ensure you get the right growth solution for your company.


About the author:

Katy Ellquist is the marketing communications coordinator for Caterpillar Financial Services Corporation where she develops and manages the global content strategy. Cat Financial offers solutions designed to help businesses succeed. Visit to learn more about current offers and the financial solutions available to your business.

Modern Contractor Solutions, November 2018
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