A commercial loan is usually a more expensive loan to a business than a personal loan. These commercial loans are collateralized by real estate, inventory, and machinery as collateral for the loan, and the commercial loan usually has a higher interest rate than the personal loan.
Commercial loans are usually issued by banks or credit unions that specialize in commercial loans. A commercial loan can be used for any purpose related to a business like buying office furniture, supplies, cars, inventory, equipment, etc. These loans are also called “secured” commercial loans. Some private lenders are willing to give a commercial loan if you can prove that your business is financially stable and has profit potential.
Banks and credit unions usually issue commercial loans because they offer better interest rates than any other loan providers, and most entities go to banks for these types of borrowing.