Commercial loans is a debt-based (not equity) arrangement where the lender provides funds for the business to grow, fund capital expenditures, or operating costs. These loans can have variable interest rates or fixed rates over the life of the loan. Generally the loan is repaid by making periodic payments which includes interest and principal. The length of the loan usually corresponds with the life of the benefit. For instance, a loan to purchase real estate would be longer than a loan to support the growth of inventory. Loans to purchase equipment will be shorter terms and will be in line with the life of the equipment.

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