The most common type of commercial loan is a commercial real estate loan. This is primarily used to purchase, refinance, or renovate income-producing properties, such as:
- Office buildings
- Retail centers
- Warehouses
- Multifamily apartment complexes
These loans are widely used because commercial real estate is a tangible asset that lenders view as lower risk compared to other business lending.
Other common commercial loans include:
- Business term loans – Fixed amounts borrowed for expansion, equipment, or working capital.
- SBA loans (7(a) or 504) – Partially guaranteed by the Small Business Administration, often used for real estate or equipment.
- Lines of credit – Flexible, short-term borrowing for operational cash flow needs.
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