COMMERCIAL LOAN Meaning and
Definition
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A commercial loan refers to a monetary arrangement in which a financial institution (such as a bank or credit union) lends money to a business or enterprise for a specific commercial purpose. This type of loan is typically obtained to meet a company's operational needs, expansion plans, or to finance major investments. Unlike personal loans, commercial loans are designed to support commercial activities and are subject to different rules and regulations.
Commercial loans are structured with specific repayment terms agreed upon by the borrower and the lender. The terms may include the loan amount, interest rate, repayment period, frequency of payments, and any collateral or guarantees required. The interest rates on commercial loans often vary depending on various factors, including the borrower's creditworthiness, risk assessment, and prevailing market conditions.
The funds acquired through a commercial loan can be utilized for a wide range of purposes. They can aid businesses in expanding their operations, purchasing equipment or inventory, funding research and development, managing cash flow, launching marketing initiatives, or acquiring other companies. Commercial loans can offer much-needed financial stability and flexibility, allowing businesses to seize growth opportunities and remain competitive in their respective industries.
Commercial loans also entail a degree of risk, both for the lender and the borrower. Lenders assess the creditworthiness and financial stability of borrowers before granting loans. Borrowers must ensure they have sufficient revenue and a feasible business plan to make timely repayments and avoid defaulting on the loan.
Overall, commercial loans play a vital role in supporting business activities by providing essential capital and financial resources necessary for growth and sustainability.
Common Misspellings for COMMERCIAL LOAN
- xommercial loan
- vommercial loan
- fommercial loan
- dommercial loan
- cimmercial loan
- ckmmercial loan
- clmmercial loan
- cpmmercial loan
- c0mmercial loan
- c9mmercial loan
- conmercial loan
- cokmercial loan
- cojmercial loan
- comnercial loan
- comkercial loan
- comjercial loan
- commwrcial loan
- commsrcial loan
- commdrcial loan
Etymology of COMMERCIAL LOAN
The word "commercial loan" consists of two components: "commercial" and "loan".
The term "commercial" originated from the Latin word "commercium", which means "trade" or "business". It later evolved in Old French as "comercial", retaining its meaning of "pertaining to trade or business". The English word "commercial" entered the language in the late 15th century, referring to activities or transactions related to trade or commerce.
The term "loan" has its roots in the Old Norse word "lánn" and Old English word "lǣn", both meaning "something lent" or "borrowing". The word "loan" itself dates back to the 13th century in Middle English, indicating the act of lending money or assets for a specified period.
When these two terms are combined, "commercial loan" refers to a loan specifically provided for business or commercial purposes.
Similar spelling words for COMMERCIAL LOAN
- commercial artist,
- commercial art,
- commercialization,
- commercial treaty,
- commercial bank,
- commercial message,
- commercialize,
- commercial agency,
- commercial law,
- commercialisation,
- commercialized,
- commercially,
- commercial bribery,
- commercialism,
- commercialise,
- commercialised,
- commercial paper,
- commercial credit.
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