How To Get Asset Financing

May 14, 2019 by Comerica Bank

Review your options carefully when considering asset finance for your small business.

Many businesses don’t have enough money to consider an outright purchase, making asset finance a necessity. You have a number of options.

Should your consider asset finance?

Asset finance makes sense for many businesses. Even if you have enough capital, investing your cash in assets leaves you with less working capital to finance operations or explore new growth opportunities.

The flexibility of asset finance options (with different cash flow and financial implications) can allow you to grow your business faster, generate more profit or simply make better purchasing decisions.

First decide what assets you need

Start by listing the assets you need in your business to:

  • Operate more efficiently by using the latest technology.
  • Grow – perhaps by using equipment to overcome current production constraints or to enter new markets.
  • Become more competitive by matching the capability of your key competitors.

Calculate your return on investment (ROI)

It’s important to make a case for each asset purchase. Investors and lenders may want to see the evidence, but it also helps you make the right decisions.

Requiring staff to make a case for asset acquisitions is a useful discipline for those lobbying for new equipment. It can sort out a genuinely productive investment from a vanity item. For example, most employees would like the latest smartphone or a new company vehicle, but would this purchase really add to the business’s bottom line?

Should you lease rather than buy?

Sometimes leasing an asset can make more sense than owning it. For example:

  • A lease agreement that includes upgrading fast-changing technology such as computers at agreed intervals can make more sense than owning these items. You don’t want to be stuck owning equipment with little resale value.
  • Leasing expensive production machinery when you know that more efficient models will be coming shortly makes better sense than buying the machinery and then facing additional costs to compete with others.
  • Leasing vehicles such as trucks can give you more flexibility than buying the vehicle, especially if demand is seasonal and surplus trucks would be standing idle.

Speak to your accountant or financial advisor about any tax implications before deciding to buy or lease.

New vs. secondhand assets

Do the assets you need really have to be brand new or would secondhand equivalents serve your purpose? Startups especially need to save every dollar to market and grow their business.

Most businesses can save considerably on everything from office furniture to production equipment by:

  • Attending local auctions and closing-down sales.
  • Bidding on online auction sites such as eBay.
  • Attending local closing-down sales or reviewing classifieds in industry journals.

Consider taking out a loan

Taking out a bank loan can be an effective way to finance business equipment purchases that you need, especially if it’s important to you to own the asset from the outset.

The advantage of a loan is that it:

  • Doesn’t tie up any capital and may not require additional security.
  • Enables you to use your existing working capital and credit lines to generate income.
  • Allows you to take advantage of cash discounts offered by the seller.

Loans should be structured to match the expected life of the asset – long-term loans for long-lasting assets such as a building and short-term loans for assets with a shorter useful life.

Our range of finance options

Comerica offers a range of financing solutions, including a business line of credit and term loans.

Small Business Administration (SBA) Loans

We’ve worked hard to establish ourselves as an SBA preferred lender. Whether you’re looking to expand your business, or purchase equipment or real estate, a Comerica Small Business Administration (SBA) Loan can assist with financing to help your company grow.

We’ll work with you to evaluate your needs and find an SBA Loan for your situation.

Nearly 90 percent of all businesses are eligible for an SBA loan program. The general qualification standards for SBA lending are less stringent than many other types of loans, but the same issues are considered such as:

  • Acceptable personal and business credit history.
  • Owner-occupied business.
  • Past earnings and/or estimated future earnings sufficient to repay the loan on time.
  • A list of available business assets and (in some cases) personal assets to secure the loan.

Be sure to prepare your case

Chatting to your accountant, financial advisor and your bank will help to ensure you get the right asset finance package tailored to your budgets and your business needs.

You can assist your case for asset finance if you come prepared with:

  • An updated cash flow forecast and business plan.
  • Evidence that the business generates sufficient spare cash to service the loan.
  • A pledge of available assets.

Be prepared also to demonstrate:

  • Why you need the asset.
  • What contribution it will make to your business’s growth and profits.

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.


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Learn More About Women-Owned Small Business Programs

March 8, 2019 by Comerica Bank

Women face more than the gender pay gap when it comes to economic headwinds. There are also specific challenges that women entrepreneurs and women-owned small businesses undergo compared to their peers and the rest of the market, respectively.

Lack of access to financing and bias in contract awarding can negatively impact the success of these organizations. However, the federal government and many other advocacy groups have made boosting support for women-owned small businesses a priority. Tackling the particular pains and pressures of being a female entrepreneur can be as easy as learning more about the women-owned small business programs that are out there to help.

Certification as a women-owned business

There are many programs designed to specifically help women- or minority-owned ventures. For instance, some companies make a specific point to reflect diversity in their supply chains by increasing the footprint of women-owned businesses. However, before organizations can take advantage of such opportunities, they must fulfill one essential prerequisite: becoming certified as a women-owned small business. There are a couple of options for certifying bodies and business designations to brush up on, including:

  • The Women-Owned Small Business (WOSB) designation offered by the U.S. Small Business Administration (SBA).
  • Certification from the Women's Business Enterprise National Council™ (WBENC).
  • Certification from the National Women Business Owners Corporation™ (NWBOC).
  • Designation as an economically disadvantaged women-owned small business (EDWOSB) from the federal government.

Though what qualifies a business for certification differs slightly depending on the options, especially regarding economically disadvantaged status, general criteria include: 

  • U.S.-citizen women directly owning at least 51 percent of the business.
  • Women overseeing day-to-day operations and making long-term decisions.
  • A woman holding the highest possible rank of officer.

Applicant organizations should ready their cases with plenty of other documentation, as the process is known to take time. The reward, however, can be immeasurable, as certified businesses can take advantage of:

SBA WOSB Contracting Program

The SBA maintains a federal contracting program designed to steer contracts toward deserving, certified WOSBs. The contracts typically reserved for the program are from industries where women-owned businesses are underrepresented, and the SBA's leveling of the playing field helps position WOSBs to compete in the federal contracting arena more effectively. Some example industries include forestry, construction, civil engineering, industrial manufacturing and energy. Businesses can be certified directly by the SBA or through the WBENC.

WBENC or NWBOC benefits

When a business is certified by either the WBENC or NWBOC, that enterprise is now entered into the fold and able to access the full range of benefits each organization offers. For instance, small businesses can display the logo of their accrediting body in a storefront or on marketing materials. The WBENC and NWBOC also run conferences, seminars, training sessions, networking events and other opportunities, while engaging with corporate partners with whom their members then have established inroads.

Getting help as a women-owned small business doesn't end with certification. There are other avenues of support and opportunity offered by institutions committed to the success of these firms. Talking to Comerica Bank today can help connect women-owned small businesses with lending assistance and financial advice.



This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice. 

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.

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What Is a SBA Loan?

February 26, 2019 by Comerica Bank

While multinational corporations and conglomerates seem to get the most news, it's small businesses who represent the real engine of growth in America. Routinely cited as the backbone of the economy, small businesses make up an overwhelming majority of the market and employ the largest share of U.S. workers. However, despite this importance to the overall economic landscape, small businesses can often feel underserved by financial institutions.

While lending to small firms has recovered in the years since cratering after the Great Recession, it has experienced stagnation and unevenness in institutional readiness to approve smaller borrowers, according to the U.S. Small Business Administration. These conditions might create problems for entrepreneurs with the next million-dollar idea, but not a million dollars in the bank to launch their venture.

Fortunately, the federal government understands the role of small business to the economy and operates an entire agency devoted to that segment. The U.S. Small Business Administration (SBA) is important for a number of reasons, but providing loans is among its most mission-critical functions. The SBA exists not only as a knowledge and advice resource for small business owners but also as a lending partner to small firms.

Whether you're looking for funds to start a small business, finance investment or expansion, or even recover from disaster, the SBA has a menu of loan offerings that can help small business owners. However, before they can take advantage of loans, entrepreneurs need to know exactly what an SBA loan is, how they can qualify and what else they should know about (like how the SBA doesn't actually disperse money itself).

What is an SBA loan?

The first thing small business owners or prospective entrepreneurs need to know about an SBA loan is that the loan does not actually come from the SBA itself. As explained by the agency, the "loan" is made possible by the SBA providing a guarantee to partner banks and lenders for the money they would then extend to small businesses. The guarantee mitigates risk for lenders by ensuring partial repayment should an owner default (in some cases, this can cover up to 85 percent of the loan amount). The SBA also reviews all applications to ensure loans fit within its established lending guidelines and standards.

This financing arrangement creates two general advantages to SBA loans:

  • With the government backing the loan, partner banks and lenders are more capable of offering flexible and attractive loan terms. Often, SBA loans come with lower down payments, more favorable rates or a longer repayment period. 
  • The federal guarantee also opens up the lending pool to small business owners or entrepreneurs who have been denied before, either because of credit history or risk associated with the loan, for example. However, the loan-backing process can encourage more lending to growing firms, unproven startups or businesses run by underserved or protected populations - including women, minorities and veterans.

The amount of an SBA loan can range from between $350,000 to $5 million, generally. Funds can be used for a number of purposes, including working capital and fixed assets.

How do I qualify for an SBA loan?

While an SBA loan is not technically a loan from the agency, the SBA is closely involved in vetting applicants and reviewing materials. In this way, SBA loans are very much like the rest of commercial and private lending in that qualifying standards generally revolve around creditworthiness, risk and business opportunity. In addition, the SBA also requires that businesses meet size definitions, be for-profit, be registered in the U.S., and that owners have equity invested in their venture and have exhausted all other means of available financing with no success.

Regarding the basic documentation you'll need, the SBA notes specific materials to prepare your application, which include: 

  • Personal information, including financial history and income tax returns.
  • Business statements, like cash flow projections and balance sheets.
  • Business valuation and debt schedule.
  • Applicable certifications, licensure or leases.
  • Past loan application history.

Entrepreneurs with no such established business information can still make an emphatic case for their loan worthiness. The SBA advises new businesses and startups to:

  • Describe their plan and business opportunity in detail.
  • Pin down exact capital needs, as well as forecast revenue projections.
  • List out collateral that can be offered.

Which SBA loan is right for you?

When asking "what is an SBA loan?", interested borrowers need to also ask "which SBA loan is best for me and my business?" This is a central question simply because there are many loan options made available by the SBA, some designed to meet specific or urgent needs. Finding the right SBA loan starts with brushing up on the various offerings and their specifics:

7(a) program

The SBA's primary program for lending, the 7(a) program acts as an umbrella for a number of diverse loans, in addition to traditional, mainstream offerings. The Standard 7(a) loan can reach $5 million and can be used for leasing or purchasing new equipment to replace old and inefficient units, or as working capital. Other loans in the program include:

  • SBA Express: Which ensures the SBA will respond within 36 hours of a request ($350,000 maximum).
  • Export Working Capital: Targeted funding for exporting businesses ($5 million maximum).
  • International Trade: Long-term financing designed for businesses growing overseas or facing stiff competition within domestic borders from foreign imports ($5 million maximum).
  • CAPLines: Short-term or seasonal loans made to help small businesses increase inventory, pay labor, finance renovations or tap revolving credit.

CDC/504 program

The CDC/504 loan program is made available to help small businesses finance large-scale investments, namely real estate. The end goal is growth, as physical expansion generates more jobs and business, and the 504 program connects qualified companies with long-term, fixed-rate funding through Certified Development Companies (CDC) to buy fixed assets or modernize operations. Possible uses for a 504 loan include purchasing an existing building, undertaking land improvements (landscaping, parking, utilities), building new structures or upgrading facilities, acquiring long-term machinery and refinancing debt linked to expansion. Particular advantages to this loan program that the SBA highlights include 90-percent financing, no balloon payments and savings used to improve cash flow.


As the self-evident name indicates, this loan program is maintained to extend comparatively small-scale loans. The target audience for these loans includes small businesses in need of working capital or funds to repair furniture, as well as startups that need only a small amount to get off the ground. The maximum loan that can be made under this program is $50,000, while the average amount is $13,000.

Disaster loans

The costs of dealing with a natural disaster can run exceptionally high for small businesses, both in the near and long term, following a calamitous event. Companies that need financing to keep the door open, employees paid and the lights on can look to the SBA, which offers disaster loans of up to $2 million for small businesses, as well as for nonprofits and homeowners. Finding the right lending partner also factors into securing the best SBA loan for you. Given the SBA itself does not disburse funds, working with the most suited SBA partner to your needs is an essential part to taking advantage of such loans. Talk to Comerica Bank today about what SBA loan options are available to your growing small business or new startup.   

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.

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How to Apply for an SBA Business Loan

October 25, 2018 by Comerica Bank

If you’re a budding entrepreneur or are already in business and looking to grow, consider applying for a Small Business Administration (SBA) loan. Whether you want to purchase assets for your business, refinance existing debt or simply expand, you can access an SBA loan through Comerica.

Finding an SBA preferred lender

You might have heard about SBA loans while not knowing exactly how your business can get one. Congress created them in 1953 to help small businesses access financing at reasonable terms.

At Comerica, we’ll work with you to evaluate your needs and find an SBA loan for your situation. We’re an established SBA preferred lender so we have plenty of experience to help your business succeed and grow.

Determine whether your business is eligible

So how do you know if your business is able to access an SBA loan? Although it may seem daunting, obtaining a business loan is not always as taxing as you might think.

Your bank will determine if you meet their criteria, but there are a few SBA-specific conditions. For the SBA’s most common loan program (general small business loans), you’ll have to:

  • Have reasonable equity invested and operate as a for-profit business.
  • Be defined as ‘small’ by the SBA.
  • Plan to do, or are already doing, business in the U.S.
  • Show a need for the loan and use the funds soundly.
  • Have no delinquent debt obligations to the US government.

Other loan programs the SBA offers through its preferred lenders may have different criteria. Take a look at the SBA’s loan program options.

Find out your credit rating

If this is the first time you’re applying for a business loan, the bank will probably take your personal credit rating into account. Find out how your credit rating stacks up with Equifax®️.

Develop a business plan

A strong, clear business plan is a vital part of the application process. Your bank will want to understand your:

  • Business and its strategy.
  • Reasons for applying for the loan.
  • Planned goals and objectives.
  • Proposed staff and their roles.

Outline how you intend to use the funds

Provide a detailed breakdown of exactly how you intend to spend the loan proceeds, and what your repayment strategy will be. You’ll need to demonstrate how you’re going to pay back the loan if your application is to be successful.

Lay out your contribution

Your bank will be interested to know how you’re contributing to your business before they grant you an SBA loan. Inform them of your:

  • Assets and liabilities.
  • Experience in business.
  • Skills and abilities.
  • Income and living expenses – you’ll need to show how much you’ll be taking out of your business to fund your personal commitments.

Make sure you know your business

You’ll be asked specific questions about your business and business plan. Ensure you have that information readily available. The more information you can provide, the better positioned your bank will be to assist you.

Collect the information you’ll need

Regardless of whether you’re preparing documents for an SBA loan or another small business loan from your bank, you’ll probably have to submit most of the following items:

  • Business plan: As mentioned above, all loan programs need a thorough business plan that should include projected financial statements.
  • Personal background information: Your educational and business background, criminal record, and previous addresses.
  • Resumes: Evidence of management or business experience, especially if you’re starting a new business.
  • Bank statements: One year of personal and business bank statements is common.
  • Income tax returns: Personal and business returns for the last three years.
  • Credit reports: A personal credit report will be part of your application process, as will a business credit report if you’re already in business.
  • Collateral requirements: You may need to offer a collateral document to secure the loan.
  • Legal documents: Your bank might also ask for some legal documents like a business license and registration, copies of contracts with any third parties, and commercial leases, depending on what’s required.

An SBA loan with Comerica

At Comerica, we value small businesses and want to help them get ahead. We have the right solutions for you and your business.

Get in touch with us to understand what we look for when considering a business loan. It will go a long way to helping your application be successful.

Next steps

  • Start gathering all the documentation you’ll need to prepare your business plan. Find out more about Comerica's SBA loans.
  • Discuss your requirements with your accountant. They can help with your application by providing advice and support.
  • Find a Small Business Banking Contact for more information about what you’ll need and how to go about applying.

This information is provided for general awareness purposes only and is not intended to be relied upon as legal or compliance advice for your business.

This article is provided for informational purposes only. While the information contained within has been compiled from source[s] which are believed to be reliable and accurate, Comerica Bank does not guarantee its accuracy. Consequently, it should not be considered a comprehensive statement on any matter nor be relied upon as such.

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