What Is the Meaning of Commercial Loans?

Commercial loans are provided for business and professional use.

Commercial loans are loans provided to various business entities by creditors for performance of business operations and professional duties. Lines of credit, term loans, Small Business Administration loans, and industry-specific loan products are common examples of commercial loan products.

Basics

Commercial loans are similar to personal loans in the sense that they can be either secured (often to business property or assets) or unsecured. Unlike personal or consumer loans, commercial loans, also called industrial loans, are provided for business or industrial purposes and professional use.

Providers

Commercial loans are provided by traditional banks that also lend to individual consumers. Credit unions and niche commercial lenders are other common providers of business loans. Many online credit lenders and lending centers are also available but you must consider company history and authenticity with online providers.

Customers

Customers for commercial loans range from sole proprietorships to large corporations. Partnerships, small-to-medium sized companies and all other business operations in between can consider commercial loan financing for business purposes including start-up and expansion

References

• Wells Fargo: Commercial Loans
• Federal Reserve Bank of San Francisco: How do you define "Commercial Loans" and what is the economic importance of these types of loans?

Resources

• Commercial Loan Center