Free Bad Credit Debt Consolidation: Can I Still Get a Loan ...

There are two types of loans that are commonly provided by financial agencies. These are secured loans that come with low interest rates and require collateral to be provided as security and unsecured loans that do not require any security and are high risk as far as the lender is concerned. When the collateral provided is real estate or landed property or house, the loan is called a mortgage loan or simply mortgage.

Commercial mortgage loans are similar to ordinary mortgage loans except for the fact that the collateral or security that is offered is used for commercial or business purposes and is not a residential apartment or house or homestead. Let's say that you had a business manufacturing a fancy electronic device. Once it comes time to grow, you're going to have to build a new factory. You'll take out this type of loan when you need to pay for the building, if you buy it.

The difference between secured and unsecured loans is that due to the offering of collateral to reduce the risk to the lender, the secure loans come at a much lower interest than unsecured loans. They are often for a longer period as well which allows for leisurely long term repayment in small and affordable amounts.

Commercial mortgage loans are usually undertaken by companies or business establishments, either limited or public companies or partnerships instead of individuals. For any loan, the lender usually assesses the prospective debtor for credit worthiness using the credit rating that is provided by agencies such as Experian, Equifax etc. The problem with lending to commercial or business establishments is that there usually is no tried and tested system for analyzing the credit worthiness of these organizations and hence the entire loaning process is made quite complicated compared to ordinary mortgages.

Most commercial mortgages have a draw back in that they do not allow the creditor to go after the debtor in case of default in repayment and offers the securing of the collateral and attaching it for liquidation as the only recourse as provided by various statutes and enactments in place. Most lenders therefore enter into an agreement to the effect that any additional amount due as part of the principal or accrued interest on the loan shall be repaid in full by the debtor through other means. The term of most commercial mortgages extend to over 20 to 30 years. There is also balloon tenure for the loan which is the actual term before the end of which the full repayment must be done. This is usually lower than the length of the loan and is agreed to by both parties.

These loans are usually taken up to purchase the business or commercial property or for extending the perimeters of ownership or as an investment by the business establishment. Property development for resale is also another reason why such loans are taken up. The eligibility for such loans depends on a variety of criteria decided by the lender and often requires good individual credit rating on the part of the owner of the business.

Some lenders also look at long term business projections and profitability for your business. These loans are characterized by higher interest rates on the loan amount compared to ordinary residential mortgages.
Uses For Commercial Loans

1. To buy commercial buildings

2. Buying land

3. Buying homes to be used for commercial purposes
Other Types of Mortgage Loans

There are plenty of types of mortgage loans that I've written about. Here are a few of them if you're interested: mortgage loans for people with bad credit, home loans for bad credit.

Other Types of Loans
bad credit signature loans
student loans for bad credit
FHA loans for people with bad credit
bad credit auto loans
bad credit loans without collateral

unsecured loans for bad credit

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