The term commercial loan refers to a loan that is offered to a business by a financial institution. This loan is provided through a debt based financing agreement between a business entity and a lender. Both banking and non banking financial corporations offer Commercial loans.

Commercial loans are helpful to small businesses that may not have sufficient funds to take care of different financial requirements. Many small businesses may not be eligible to apply for regular loans due to eligibility criteria, high upfront fees and charges, and strict regulatory barriers. Small businesses must make use of alternative debt products for their financial assistance. These include consumer credit, unsecured loans, commercial loans, a line of credit.