Business & Commercial Loans
What it is:
Loans tailored for businesses—these can fund working capital, expansions, equipment purchase, real estate for business premises, or major operational expenditures. Commercial loans often involve larger sums, different risk profiles, and more documentation.
Pros:
- Helps business grow or expand without having to use all capital upfront.
- Can acquire assets (property, equipment) that assist in business operations.
- Good commercial loans may offer favourable tax or depreciation benefits on assets.
Cons / Things to watch:
- Risk if business revenue falls: repayments still must be made; default could impact business operations or lead to asset seizure.
- More documentation, longer processes; stricter lender scrutiny.
- Interest costs, fees, sometimes stricter collateral and guarantees needed.
| Feature | Details |
|---|---|
| Purpose | Buying or leasing commercial property; purchasing equipment or machinery; funding inventory; expansion; cash flow management; refinancing business debt. |
| Secured vs Unsecured | Many commercial loans are secured—business assets, property, machinery may act as collateral. Some smaller business loans are unsecured (but then rates higher / stricter eligibility). |
| Repayment structure | Could be term loans, lines of credit, credit facilities; repayment could include interest‑only period or variable/fixed rates; sometimes balloon payments. |
| Required documentation | Financial statements (profit/loss, balance sheet), business plan, forecasts, sometimes personal guarantees. Lenders assess cash flow & business stability. |
| Loan size & terms | Can be large sums; terms vary from short (1‑2 years) to long (5‑10 yrs or more), depending on use, risk, asset lifespan. |