Glossary
What is Commercial Mortgage?
A commercial mortgage is a loan secured by commercial real estate, such as an office, retail space, warehouse or mixed-use property. It can be used to purchase, refinance or improve property used for business or investment. Commercial mortgages often have shorter terms than residential mortgages and may include a balloon payment. Lenders consider the property's value, the loan-to-value ratio, the borrower's financial strength, and for owner-occupied properties, the business's cash flow.
Example
A manufacturing company takes out a commercial mortgage to buy the building it has been renting.
Related funding
Commercial Real Estate: Buy, refinance or improve the property you operate from.
Related terms
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