Commercial Loans are mortgages that are secured by commercial property. Examples of commercial properties are: office building, shopping center, industrial warehouse, or apartment complex. The proceeds of this type of financing are typically used to acquire, refinance, or develop commercial property.
The biggest difference between a commercial loan and a residential loan is that a commercial loan is written and qualified based on the amount of income the property produces where a residential loan is written and qualified based on the personal income of the borrowers.
Commercial loans do take the borrowers personal income into consideration, but the loan amount is calculated based on the amount of income the property produces.