A commercial loan is a type of financing provided by a bank, credit union, or private lender to businesses for operational needs, expansion, or property purchases. Unlike residential mortgages, which are designed for individuals buying homes, commercial loans are tailored for companies and can be used for real estate, equipment, working capital, or refinancing debt. Loan terms often vary from 5 to 20 years, with interest rates based on creditworthiness, collateral, and market conditions. These loans typically require a business plan, financial statements, and proof of cash flow to demonstrate repayment ability. Commercial loans are risk-based, meaning stronger businesses with lower risk profiles secure better rates and terms, while higher-risk borrowers may face stricter requirements or higher costs.