Commercial business loan rates refer to the amount of money that the business will have to pay the lender for the loan. The principal is the amount of money that the lender is lending the business and the rates or interest rates is the amount of money on top of the principal that has to be paid back. Typically the interest rates are figured as percentages of the principal amount.
Commercial business loan rates fluctuate like any interest rates do. The term is a bit different than other types of loans. The term is usually shorter than it is for say a residential mortgage. The interest rate is usually a bit higher than it is for a residential loan and there are other aspects that differ when it comes to commercial business loan rates.
The Economy
The state of the economy drives all interest rates, this is true of the commercial rates as well. When the economy is bad, banks become a bit stricter with their lending procedures, but the rates may actually be lower than when the economy is good. So it can be harder to get a loan but you may ultimately pay less for the loan.
Besides the economy there are other things that will affect the commercial business rates.
Creditworthiness
If the business is a leader in its field and well regarded due to its excellent credit rating than this type of business is likely to get a better rate than say a business that is a start up or even a business that is established but is taking the loan to branch out into an area that they are not considered experts in.
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