Commercial Loan

In real estate and finance, a commercial loan is a type of loan made by a commercial bank primarily for business purposes rather than for the purchase or financing of real property. These loans are often unsecured, meaning they are not backed by real estate or other specific collateral, and they typically have shorter repayment terms than mortgage loans. Commercial loans may be used to cover operating expenses, purchase equipment, manage cash flow, or fund short-term business needs. Because they are based largely on the borrower’s creditworthiness and business financials, commercial loans often carry higher interest rates than secured, long-term financing.