CIT Finance 101: A Beginner’s Guide to Commercial Loans

An Introduction to CIT Finance

When you’re ready to expand your business, commercial loans are a great option to consider. CIT finance, or commercial and industrial finance, provides funding for things like equipment, real estate, working capital, and acquisitions.


To qualify for a CIT loan, you’ll need to have been in business for at least two years and have a credit score of 680 or higher. You’ll also need to provide financial documents like tax returns, balance sheets, cash flow statements, and projections to show the stability and growth potential of your company.

Types of CIT Loans

There are a few common types of CIT loans:

  • Equipment loans finance the purchase of necessary equipment, tools, and machinery. These typically have 3 to 7-year terms.
  • Commercial mortgages provide funding to purchase commercial real estate. Terms are often 10-30 years.
  • Working capital loans give you funding for daily business expenses like inventory, payroll, and marketing. These usually have 1 to 3-year terms.
  • Lines of credit provide access to revolving credit that you can tap as needed. Interest rates are variable.
  • Term loans offer a lump sum of cash, typically 3 to 10-year terms. These can be used for any business purpose.

CIT lenders want to see that the loan proceeds will be used to generate more business and increase your company’s ability to repay the loan. Be prepared to discuss your growth plans and how the additional funding will impact your operations.


Types of CIT Loans and Lending Options

CIT finance offers several types of commercial loans to meet the needs of businesses. The two most common are:

1. Term Loans

Term loans provide businesses with a lump sum of cash upfront that is paid back over a fixed time period, typically 3 to 25 years. The borrower makes fixed monthly payments that include both principal and interest.

Term loans are a good option if you need capital for major business expenses like equipment, real estate, or expansion.


2. Lines of Credit

A line of credit gives businesses access to revolving credit that can be drawn upon as needed. The lender approves a maximum loan amount, and the borrower can withdraw funds up to that limit.

Interest is only charged on the amount actually borrowed. Lines of credit are flexible and useful for covering operating expenses, inventory, or short-term cash flow issues. The funds can be borrowed as needed and repaid on your schedule.

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Other CIT financing options include:

  • Equipment financing: Loans specifically for purchasing essential equipment, machinery, and vehicles. Often secured by the equipment itself.
  • Accounts receivable financing: Uses your outstanding invoices and accounts receivables as collateral for a loan. As you get paid by customers, you repay the loan. Helps with cash flow gaps.
  • Purchase order financing: Short-term financing based on existing purchase orders. As goods are delivered and paid for, the loan is repaid. Speeds up fulfillment of orders.
  • SBA loans: Government-backed small business loans with more lenient requirements. Useful when traditional financing is not available.
  • Crowdfunding: Raising small amounts of money from a large number of people, usually via the Internet. An alternative for startups or businesses with an innovative product.
  • Angel investment: Private capital provided by angel investors in exchange for equity in the business. More flexible than traditional financing but you lose some ownership and control.

Whether you need funds for expansion, operating expenses, equipment or real estate, CIT finance has a variety of lending solutions and options to help your business succeed.

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Qualifying for a CIT Loan: What Lenders Look For

To qualify for a commercial loan from a CIT lender, they will evaluate several factors about your business and financial standing which includes: 

1. Credit score

Your business credit score is one of the first things a CIT lender will review. They want to see a score of 680 or higher, which shows you have a proven track record of paying off debts and managing credit responsibly.

If your score needs improvement, you may need to take steps like reducing debt or disputing errors before applying.

2. Cash flow and collateral

Lenders will analyze your business’s cash flow to determine if you generate enough income to repay the loan. Provide tax returns, profit and loss statements, balance sheets, and business bank statements to give them a clear picture of your revenue and expenses.

They will also evaluate any collateral you can pledge as security, like equipment, real estate, or accounts receivable. More collateral means lower risk for the lender.

3. Business plan

A well-developed business plan demonstrates your vision and strategy for using the commercial loan to grow your company. Include details on how you will invest the funds and your projections for how it will impact revenue and profitability.

4. Equity and experience

The level of equity or cash you have invested in your business, known as “skin in the game,” signals your commitment to the company’s success.

The lender also wants to see that you and your management team have sufficient industry experience and expertise to achieve your business goals. Provide details on owners’ and key employees’ professional backgrounds and accomplishments.


With the right documentation and a solid business plan, you’ll be well on your way to getting the funding you need to take your company to the next level.

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