
COMERCIAL LOANS

A commercial loan is a debt-based financing agreement between a company and a financial institution. It’s usually utilized to cover big capital expenditures and/or operational costs that the company wouldn’t be able to cover otherwise. Small firms are frequently denied direct access to bond and equity markets due to high upfront fees and regulatory barriers. Smaller enterprises, like individuals, must rely on alternative lending products such as lines of credit, unsecured loans, and term loans.
- A commercial loan is a loan between a financial institution and a company that is used to cover operating and capital expenses.
- Collateral, such as property or equipment, is required for many commercial loans.
- Financial statements are typically required to demonstrate a company’s ability to repay.
- Even though most commercial loans are short-term, they can be “rolled,” or renewed, to extend the loan’s duration.

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