Randa Kriss is a lead writer and NerdWallet authority on small business. She has nearly a decade of experience in digital content. Prior to joining NerdWallet in 2020, Randa worked as a writer at Fundera, covering a wide variety of small-business topics and specializing in the lending and banking spaces. Her work has been featured in The Washington Post, The Associated Press, MarketWatch and Nasdaq, among other publications. She has also hosted a webinar as part of the SBA's 2024 National Small Business Week Virtual Summit. Randa is passionate about helping small-business owners make educated financial decisions, especially when it comes to affordable funding. She is based in Chicago.
Assigning Editor Sally Lauckner
Assigning Editor | Small business
Sally Lauckner is an editor on NerdWallet's small-business team. She has over 15 years of experience in print and online journalism. Before joining NerdWallet in 2020, Sally was the editorial director at Fundera, where she built and led a team focused on small-business content and specializing in business financing. Her prior experience includes two years as a senior editor at SmartAsset, where she edited a wide range of personal finance content, and five years at the AOL Huffington Post Media Group, where she held a variety of editorial roles. She is based in New York City.
Fact Checked Co-written by Karrin Sehmbi Lead Content Management Specialist Karrin Sehmbi
Lead Content Management Specialist | Small business
Karrin Sehmbi is a lead content management specialist on the small-business team. She has more than a decade of editorial experience in the fields of educational publishing, content marketing and medical news. She has also held roles as a teacher and tutor. Karrin is based in the San Francisco Bay Area.
Many, or all, of the products featured on this page are from our advertising partners who compensate us when you take certain actions on our website or click to take an action on their website. However, this does not influence our evaluations. Our opinions are our own. Here is a list of our partners and here's how we make money.
Nerdy takeawaysA commercial loan is debt-based financing that’s used to fund business expenses, like purchasing equipment or real estate. With a commercial loan, you borrow capital from a financial institution, such as a bank, credit union or private lender, and you repay it over time.
“Commercial loans” and “ business loans ” are often used interchangeably. Commercial loan, however, tends to refer to products targeted at larger businesses. These loans are typically available in larger amounts and often require physical collateral . They may also have more in-depth applications and stricter qualification requirements.
Commercial loans are typically structured as business term loans or lines of credit.
For a term loan, a lender provides you with a lump sum of capital that you repay — with interest — over a specific period of time.
With a commercial line of credit, you have access to a set amount of funds that you can draw from and use as needed. You only pay interest on the money you use, and once you’ve repaid what you’ve borrowed, the credit line resets.
Many, but not all, commercial loans will require collateral. Traditional lenders are more likely than online lenders to require that you put up collateral to secure your loan.
We’ll start with a brief questionnaire to better understand the unique needs of your business.
Once we uncover your personalized matches, our team will consult you on the process moving forward.
Some types of commercial loans are meant for specific purposes, such as:
Equipment financing . These loans can help you purchase large or highly specialized equipment for your business.
Commercial real estate loans . Similar to mortgages, these loans can help you buy or renovate property.
Commercial auto loans . These are used to buy vans, trucks or other vehicles for your business. Commercial construction loans . Finance new building projects or major renovations with these loans.Commercial bridge loans . This is a type of short-term financing typically used in commercial real estate to take advantage of an immediate opportunity and cover the gap until you can find a long-term option.
Commercial hard money loans . Hard money lenders focus heavily on the value of your collateral — usually commercial property or land — when underwriting applications, as opposed to more traditional loan requirements.
You can get a commercial business loan from multiple sources: banks , credit unions, SBA lenders, online lenders and even nonprofit lenders. Factors like cost, funding time and your business’s qualifications can help you determine where to look.
Here’s a curated list of some of the top providers offering commercial loans:
with Fundera by NerdWallet
with Fundera by NerdWallet
Funding Circle - Online term loan
NerdWallet Ratingwith Fundera by NerdWallet
with Fundera by NerdWallet
Bluevine - Line of credit
NerdWallet Ratingwith Fundera by NerdWallet
with Fundera by NerdWallet
JR Capital Equipment Financing
NerdWallet Ratingwith Fundera by NerdWallet
with Fundera by NerdWallet
TAB Bank - Term loan
Read our guide for detailed information on how to get a business loan and to calculate your estimated loan payments.
Frequently asked questions What are some alternatives to commercial business loans?If a commercial loan doesn’t make sense for your business, consider these alternatives:
Short-term loans may be a better option for your business if you need to manage your cash flow or cover daily expenses. They’re usually available from online lenders and fund quickly but often have higher interest rates.
Small-business grants can help you to avoid debt entirely. Although grant applications can be competitive, they’re a great solution if you can secure one. They’re available from federal, state and local governments, as well as private corporations.
Business credit cards can help you spread purchases out over several payments. Still, their relatively low credit limits may make it challenging if you need to finance a substantial purchase. You might also consider a personal loan for your business , which will likely offer a higher limit than a credit card but may come with a higher interest rate.
Do commercial loans require collateral?Many, but not all, commercial loans will require collateral. Traditional lenders are more likely than online lenders to require that you put up collateral to secure your loan.
Is a commercial loan the same as a business loan?Essentially, yes. Both of these terms refer to money that you borrow from a lender to pay for business expenses and pay back over time. However, sometimes “commercial loan” is used to describe loans for larger companies, and “business loan” loans for smaller companies.
What are some alternatives to commercial business loans?If a commercial loan doesn’t make sense for your business, consider these alternatives:
Business credit card vs. business loan
Do commercial loans require collateral?Many, but not all, commercial loans will require collateral. Traditional lenders are more likely than online lenders to require that you put up collateral to secure your loan.
Is a commercial loan the same as a business loan?Essentially, yes. Both of these terms refer to money that you borrow from a lender to pay for business expenses and pay back over time. However, sometimes “commercial loan” is used to describe loans for larger companies, and “business loan” loans for smaller companies.
Rosalie Murphy, a NerdWallet lead writer, contributed to this article.
About the authorsYou’re following Randa Kriss
Visit your My NerdWallet Settings page to see all the writers you're following.
Randa Kriss is a small-business writer who joined NerdWallet in 2020. She previously worked as a writer at Fundera, covering a wide variety of small-business topics including banking and loan products. Her work has been featured by The Washington Post, The Associated Press and Nasdaq, among others. Randa earned a bachelor's degree in English and Spanish at Iona College. See full bio.
You’re following Karrin Sehmbi
Visit your My NerdWallet Settings page to see all the writers you're following.
Karrin Sehmbi is a content management specialist on the small-business team. She has more than a decade of editorial experience in the fields of educational publishing, content marketing and medical news. See full bio.
On a similar note.
American Express National BankAmerican Express® Business Checking
NerdWallet RatingNerdWallet's ratings are determined by our editorial team. The scoring formulas take into account multiple data points for each financial product and service.
Annual Fee Read Review Learn more MORE LIKE THIS Small-Business Loans Small BusinessA business line of credit gives you access to a set amount of capital that you can draw from as needed. You only pay interest on the funds you draw.
Use NerdWallet’s business loan calculator to estimate monthly principal and interest costs based on the loan amount, loan term and APR.
Finance Smarter Credit Cards Financial Planning Financial News Small BusinessDownload the app
Disclaimer: NerdWallet strives to keep its information accurate and up to date. This information may be different than what you see when you visit a financial institution, service provider or specific product's site. All financial products, shopping products and services are presented without warranty. When evaluating offers, please review the financial institution's Terms and Conditions. Pre-qualified offers are not binding. If you find discrepancies with your credit score or information from your credit report, please contact TransUnion® directly.
NerdUp by NerdWallet credit card: NerdWallet is not a bank. Bank services provided by Evolve Bank & Trust, member FDIC. The NerdUp by NerdWallet Credit Card is issued by Evolve Bank & Trust pursuant to a license from MasterCard International Inc.
Impact on your credit may vary, as credit scores are independently determined by credit bureaus based on a number of factors including the financial decisions you make with other financial services organizations.
NerdWallet Compare, Inc. NMLS ID# 1617539
California: California Finance Lender loans arranged pursuant to Department of Financial Protection and Innovation Finance Lenders License #60DBO-74812
Insurance Services offered through NerdWallet Insurance Services, Inc. (CA resident license no.OK92033) Insurance Licenses
NerdWallet™ | 55 Hawthorne St. - 10th Floor, San Francisco, CA 94105