A commercial property loan is a loan that is given from a banker to a business entity for the express purpose of improving upon a commercial property. These types of loans are much different from the ordinary residential loan that most people think of when they think of real estate.

There are actually many advantages to receiving a commercial property loan. Below are just a few of those advantages.

1. Commercial property loans are usually much larger in scope than residential loans. Because most commercial properties are bigger than a normal residence, the money is used to improve upon the buildings also needs to be bigger. The federal regulations that limit the amount of money that certain borrowers can receive from banks in the residential spectrum do not apply to the commercial property loans business. This gives owners of commercial property much more freedom when it comes to improving upon the building as well as marketing that building for sale.
2. Commercial property loans usually have much less regulation placed upon them by the federal government and by bankers themselves. As stated before, the regulations that limit residential borrowing do not apply to the commercial property loans industry. However, commercial property loan borrowers also have the additional freedom of not being limited by bankers. Commercial property owners are considered less of a risk to loaning officers their building is an investment that is expected to create a return for all involved. It is usually also assumed that commercial property owners have more experience dealing with large amounts of money than residential property owners. These assumptions combined with an increased ability to receive a return on investment a much looser situation when it comes to borrowing for commercial property.
3. Commercial property loans usually have a lower interest rate than other types of loans. Because commercial property owners are considered less of a risk by banking professionals, they reward this type of investment with a lower interest rate. Also, because commercial property loans usually have a longer term than other types of real estate loans, the bank does not lose any money by giving this lower interest rate to their borrowers.