Finding the right loan for your small business
Published September 23, 2025 by Angela Talbot | Reading Time: 4 minutes
Finding a small business loan that fits your business’s particular needs is an important decision. Choosing the wrong business loan can set your company back months or even years. The right financing, however, can fuel growth, help you seize opportunities, and provide the working capital you need to thrive. Understanding your options is the first step toward making an informed decision that supports your business goals.
At Webster First, we’ve helped countless Massachusetts businesses navigate their financing options. With deep roots in communities like Worcester and Boston, we understand the unique challenges and opportunities that local businesses face. Our award-winning commercial lending team has earned recognition as a top lender by Banker & Tradesman, reflecting our commitment to helping businesses succeed.
This guide will walk you through the main types of commercial loans available and help you determine which option best fits your business needs. We’ll also explain why working with a local credit union like Webster First can make all the difference in your financing experience.
Types of loans for small businesses
Not all business loans are created equal. Each type serves different purposes and comes with distinct advantages. Understanding these differences will help you choose the financing that aligns with your specific business objectives.
Commercial real estate loans
Commercial real estate loans provide financing for purchasing, refinancing, or renovating business properties. These loans work well for both owner-occupied facilities and investment properties.
If you’re buying a building for your business operations or looking to expand into a new location, this type of loan makes sense. The property itself typically serves as collateral, which often means more favorable interest rates compared to unsecured loans.
Our commercial real estate loans offer variety in terms and rate options. We provide flexible underwriting with local decision-making, meaning your loan application gets reviewed by people who understand the Massachusetts market. For owner-occupied properties, you may also be eligible for the SBA’s 504 Loan Program, which can provide additional benefits and lower down payment requirements.
Construction loans
Construction loans support building projects from the ground up or major renovations of existing facilities. These loans are particularly useful for businesses that need to expand their physical footprint or developers working on residential projects.
The structure of construction loans differs from traditional term loans. During the construction phase, you typically pay interest only on the amount drawn. Once construction is complete, the loan can often convert to permanent financing, streamlining the process and reducing closing costs.
Webster First offers construction and development loans for both owner-occupied and income-producing properties. Our flexible terms during the build-out phase help manage cash flow during construction. Like our real estate loans, owner-occupied construction projects may qualify for SBA 504 financing.
Term loans
Term loans provide a lump sum of capital that you repay over a set period with a fixed repayment schedule. These loans work well for specific business investments.
Common uses for term loans include purchasing equipment, machinery, or vehicles for business operations.
The predictable payment structure of term loans makes budgeting easier. You’ll know exactly what you owe each month and when the loan will be paid off. These loans can be secured with various types of collateral.
Benefits of choosing Webster First Federal Credit Union for your business loans
Working with the right lender can be as important as choosing the right type of loan. Local credit unions like Webster First offer several advantages over larger national banks.
Local decision-making
Your loan application gets reviewed by people who understand the Massachusetts business environment. Our commercial lenders live and work in the same communities as our members. This local knowledge means we can often approve loans that larger banks might reject due to rigid underwriting criteria.
Local decision-making also means faster responses. Instead of sending your application to a distant underwriting department, we handle the review process right here in Massachusetts. This can significantly reduce the time between application and approval.
Flexible terms
As a credit union, Webster First operates differently from traditional banks. We’re owned by our members, not shareholders, which means we can focus on what’s best for our members rather than maximizing profits.
This member-focused approach translates into more flexible loan terms. We can work with you to structure payments that fit your cash flow patterns. We’re often able to accommodate requests that larger lenders cannot.
Award-winning service and support
Our award-winning commercial lending team provides personalized service throughout the entire loan process. You’ll work with the same team members from application through closing and beyond. This continuity means better communication and a smoother experience overall.
Webster First has earned recognition as one of America’s Best Regional Banks and Credit Unions by Newsweek and our commercial team has earned Top Lender awards from Banker and Tradesman. These awards reflect our commitment to exceptional service and financial stability.
How to apply
Getting started with a commercial loan at Webster First is straightforward. The first step is connecting with our commercial lending team. It’s easy to get started online.
Our team will explain the application requirements and help you gather the necessary documentation. This might include business tax returns, financial statements, and details about the property or equipment you’re financing (or refinancing).
Once we receive your complete application, our local underwriting team reviews everything. We’ll keep you informed throughout this process and let you know if we need any additional information. Most importantly, we’ll work with you to address any concerns that arise rather than simply declining your application.
Ready to discuss your business financing needs? Let’s work together to find the right loan for your business goals.