Commercial loans are used by businesses to acquire, develop, or refinance income-producing real estate such as office buildings, retail centers, warehouses, and apartment complexes with five or more units. These loans can be obtained through banks, credit unions, or private lenders and often require a strong business plan, proof of income, and property details. The loan terms typically range from 5 to 20 years with amortization periods that may extend longer, and they often include balloon payments.

Unlike residential loans, commercial financing focuses heavily on the business’s financial health, the property's potential income, and market conditions. Lenders evaluate risk based on metrics like the loan-to-value (LTV) ratio, debt service coverage ratio (DSCR), and net operating income (NOI). Interest rates and terms vary based on the property type, borrower profile, and lender's requirements. These loans are crucial for expanding businesses and real estate investors seeking long-term growth.