Here are some key features of Commercial loans:

Purpose:

- Working Capital: To finance day-to-day operations, such as inventory, payroll, and other operational expenses. Capital
- Expenditures: To fund the purchase of equipment, machinery, or real estate.- Expansion: To support business growth, open new locations, or enter new markets.

Types of Commercial Loans:

- Term Loans: A lump sum of capital is provided with a fixed repayment schedule.- Lines of Credit: Businesses can draw funds up to a predetermined limit as needed, similar to a credit card.- Commercial Real Estate Loans: Specifically for purchasing, refinancing, or developing commercial properties.- Equipment Loans: Financing for the purchase of machinery, vehicles, or other equipment.

Interest Rates:

- Fixed Rate: The interest rate remains constant throughout the loan term.- Variable Rate: The interest rate can fluctuate based on market conditions.

Collateral:

- Secured Loans: Backed by collateral, such as business assets, real estate, or inventory.- Unsecured Loans: Do not require specific collateral but may have higher interest rates.

Repayment Terms:

- Short-Term Loans: Repaid within a few months to a few years.- Long-Term Loans: Repaid over an extended period, often with a fixed monthly payment.

Qualification Criteria:

- Lenders evaluate the business's financial health, credit history, cash flow, and the purpose of the loan.

Lender Types:

- Traditional Banks: Offer a wide range of commercial loan products.- Online Lenders: Provide a faster application process, often with different criteria.- Credit Unions: Non-profit financial institutions that may offer competitive rates.

Government-backed Loans:

- Some commercial loans are guaranteed or partially guaranteed by government agencies to encourage lending to small businesses.