What is a commercial loan?
A commercial loan is money lent to a business, for the purposes of that business, on terms set by a loan agreement between the lender and the borrower. The word "commercial" marks it off from consumer lending, where an individual borrows for personal use and a body of statute sets out the form of the agreement and the borrower’s rights. In commercial lending the borrower is usually a limited company, an LLP or a partnership, the purpose is trading, buying an asset or buying a property for the business, and the agreement is largely what the two parties make it.
In everyday use the term covers most of what this site explains: term loans, commercial mortgages, bridging loans, asset finance, invoice finance and revolving facilities are all commercial lending. We have access to a range of UK commercial finance lenders through our principal, White Rose Finance Group Limited. Each lender publishes its own products, amounts, terms and criteria and makes its own decision.
How commercial lending differs from consumer lending
The borrower is a business rather than a person, so the lender underwrites accounts, bank statements and a trading record rather than a payslip. The purpose is commercial, so the loan is sized on what the business can carry from profit rather than on household affordability. The agreement is negotiated rather than prescribed: covenants, security, events of default and early repayment terms are set by the document the parties sign. And the lending to a limited company or an LLP sits outside the consumer credit regime, which is the subject of the regulatory status below rather than of this page.
CapExpand Ltd (FRN 1060885) is a credit broker and an Appointed Representative of White Rose Finance Group Limited (FRN 630772), which is directly authorised and regulated by the Financial Conduct Authority. We are a broker, not a lender. We work with UK limited companies and LLPs only, for business and commercial purposes. If you have a complaint, our complaints page explains how it is handled.
The main kinds
By repayment: a term loan, repaid in instalments over a fixed period; a revolving facility, drawn and repaid within a limit; a bridging loan, repaid in one sum from a defined exit. By security: unsecured, resting on the trading record and the directors’ guarantees; secured on property by a legal charge; secured on equipment by ownership or a charge; secured on the book debts by assignment; or secured on the whole of a company’s assets by a debenture. By purpose: working capital, an asset purchase, a property purchase, an acquisition, a development, a refinance. Most commercial loans are described by one word from each list.
What a commercial loan agreement contains
The amount and the purpose. The term and the repayment schedule. The interest rate, fixed or over a reference rate, and the fees. The security and the guarantees. The conditions precedent that have to be satisfied before the money is advanced. The representations the borrower makes about itself. The covenants it promises to keep for the life of the loan. The events of default that let the lender demand repayment. And the early repayment terms. A borrower who reads the covenants and the events of default before signing knows what the lender can do and when; one who reads only the rate does not.
Who the borrower is, through CapExpand
We work with UK limited companies and LLPs only, for business and commercial purposes. We arrange loans from £10,000, for businesses that have traded for 3 months or more. Enquiring does not affect your credit score. If you apply to a lender, it runs its own credit search, which may be recorded on your file.
Where to read next
The term loan answer explains the commonest structure. The secured business loans page explains the forms of security and the unsecured business loan answer what stands in for them. The business loans page sets out what lenders publish for each, and the lenders-look-for answer explains what is read before a decision.
Frequently asked questions
Is a commercial loan the same as a business loan?
In everyday use, yes. "Commercial loan" is the broader term, covering every kind of lending to a business; "business loan" is most often used for an unsecured or secured term loan to a trading company.
Is a commercial mortgage a commercial loan?
Yes. A commercial mortgage is a commercial loan secured by a legal charge over business or investment property and repaid over a long term.
Can a sole trader get a commercial loan through CapExpand?
Through CapExpand the borrower is a limited company or an LLP. Each lender publishes who it lends to.
Does enquiring affect my credit score?
Enquiring does not affect your credit score. If you apply to a lender, it runs its own credit search, which may be recorded on your file.
How is CapExpand paid?
We will receive commission from lenders. On some cases we also charge a fee, which we set out in writing and agree with you before you proceed.
More funding questions answered
- Invoice finance with bad creditWhy lenders look at your customers' credit rather than yours.
- Do I need a business bank account for funding?Whose name the account has to be in, and why Open Banking comes up.
- Do I need to be a homeowner to get a business loan?No. Each lender sets its own view of home ownership, and which products care least.
- Can I get asset finance on used machinery?Yes. What each lender asks about age, private sellers and auctions, and how the VAT works.
- Bridging loan vs development finance: how do they differ?Bridging buys time on a property that exists; development finance builds one that does not.
- How much deposit do I need for a commercial mortgage?Each lender publishes its own maximum loan-to-value, and what moves the number.
Lending to the business, for the business
The amount, the purpose and how long the company has traded are enough for us to check the case against lenders’ published criteria before anything is sent anywhere.
Sources
Checked 26 October 2026. This page defines the term in general use; each lender publishes its own products and criteria, and nothing on this page is a quote or legal advice.
CapExpand Ltd (FRN 1060885) is a credit broker and an Appointed Representative of White Rose Finance Group Limited (FRN 630772), which is directly authorised and regulated by the Financial Conduct Authority. We are a broker, not a lender. We work with UK limited companies and LLPs only, for business and commercial purposes. We do not provide financial advice.