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Commercial loan is a type of
short-term loan used in financing business to
businesses operations or
transactions. It is also known as mercantile credit
and sometimes referred to as trade
credit. Commercial loans are opposite
consumer loan whereas its use is to
increase the volume of supply of the borrower
in his business. Usually this
commercial loan, from the term itself is used solely
in wholesale or large inventory
businesses.
While the consumer loan is intended
for the borrower’s day-to-day needs and
expenses. A commercial loan is
intended for business while a consumer loan is for
the customers or end users of the
products that is why the term fits it. Commercial
loan is a loan that also involves the
production and transfer of either raw materials
or finished goods. These goods are
intended for supplying goods to wholesale
stores, or for purchases of their
inventories.
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