Commercial Loans and Their Types at A Glance


Polana Henderson, Negosentro |  A loan is a kind of debt to meet your financial demands at the time of need. There are few types of loans available in the market such as personal loans, educational loans, auto loans, and home loans, loans against credit cards and commercial loans. It depends on your needs that what type of loans you require. But if you want to take some financial help for your business expansion then you can apply for the commercial loans. This loan can be provided for buying new tools and equipment’s for your business and you can also opt for this commercial loan for buying a new property for your business. Before you apply for such loan, you must check the interest rate, hidden charges and terms of the loan.  

Commercial loans: These are the loans which are issued for the business purposes. In this type of loans, the assets can be seized sometimes whenever the borrower is not being able to pay his or her debt in a deadline of time.

The banks have the best interest rates and are easier to work with and people prefer to get loans from them. However, there are several financial companies in the market who offer lucrative offers too. They do require personal guaranty for giving a loan. Bank loans are further divided into two types:

  1. Term loans: It is a loan made for a time like 3 to 4 years or any other tenure.
  2. Credit loans: They can be secure and unsecure, but the banks try to make these secure ones only.

But if you have a bad credit score then you would not able to get the business or commercial loan from the bank and in this case, you need to apply for the same to a private lender. Apart from that, banks will take much time to disburse your loan, and if you need some cash within a short time, then you can go for the online loan approval process. You can simply apply for the commercial loan on the official website of a private lender and upload your required documents. Then the lender will verify your documents and send you the loan approval note within two to three days. If you agree with their terms and conditions, then they will send the loan amount to your bank account within a stipulated timeframe.

Types of commercial loans

Real estate: Real Estate loans are issued for constructing a building or buying a property. Real estate loans are further divided in two types.

  • Construction 
  • Commercial mortgages

SBA (small business loans): These types of loans are issued to the lenders for doing small scale business. These types of loans are mostly issued by the banks. These types of loan are further divided into two types:

  • Real estate
  • Working capital

Asset based: In these types of loans, the loans are issued by keeping the papers of the asset as a guarantee. In case the borrower is not able to pay the loan then their assets will be seized by default by the bank. These types of loans are divided in further two types:

  • Inventory
  • Accounts receivable

Leases: A lease loan is a contract between two parties, in this type of loan the user or the lessee must pay to the owner of the property. Or the tenant must pay the rent to the owner of the property which the tenant is using currently. The different type of asset is given below:

  • Cars
  • Equipment loans
  • Intangibles

So now you can check the rate of interest, application process, hidden charges and application fees of different lenders and then apply for your commercial loan accordingly.

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