Commercial loan is a secured, debt-based loan agreement for lending money between a business and a financial institution, such as a bank, to fund capital expenditure, property acquisitions, operational expenses, or as otherwise agreed upon by the lender. For instance, if a small retailer needs to purchase inventory ahead of the festive season, it can approach an NBFC to borrow the required amount and repay it over a stipulated time duration.

Equipment Financing: Equipment financing is a secured loan that helps a business buy or lease business-critical assets such as machinery, vehicles, or technology. For instance, if a manufacturing firm requires around INR 70 lakh for equipment, it can borrow that amount to acquire CNC machines, and repay the sum over 5–7 years. This is one of the most common types of commercial loans offered to businesses.

Commercial Real Estate: A commercial property loan is used to purchase, develop, refinance, or renovate income-producing business properties such as office buildings, warehouses, retail spaces, etc. For instance, a hotel chain often obtains a commercial real estate loan to renovate its downtown property for INR 2 crore, amortized over 15 years.

Bank Overdraft Facility: In a commercial bank loan structure like a bank overdraft facility, there is a short-term, revolving credit line linked to a business transaction account. This means the borrowing company can exceed the set balance in the account up to an approved limit and only pays interest on the overdrawn amount. For instance, if a retail shop has an overdraft limit of up to INR 10 lakh and withdraws INR 2 lakh to cover a sudden supplier invoice, it can repay the overdrawn amount when its cash flow improves.

Term Loans: A term loan is a lump-sum disbursement provided when a business requires a one-time payment. The payment must be paid back to the lender with scheduled principal, interest, and within a stipulated time period. For instance, a manufacturing firm can borrow INR 1 crore as a five-year term loan to purchase new machinery and repay that amount with interest at 9 percent per annum.

Letter of Credit: A letter of credit is a bank-issued guarantee on behalf of a business buyer to the seller. The business buyer utilizes the funds for goods and services in domestic and international trade once it meets all agreed requirements, documents, and conditions. For instance, a buyer in Dubai imports textiles from a Mumbai exporter; on behalf of the importer, the bank issues a letter of credit guaranteeing payment of INR 50,000 to the exporter when the quality inspection and shipping documents are presented.

SME Collateral-Free Loans: SME collateral-free loans are designed for micro, small, and medium enterprises, which guarantee up to INR 5 crore without any asset pledge. Instead, they rely on the company's creditworthiness, future potential, credibility, etc. For instance, if a bakery requires a business property loan of INR 20 lakh, it will be provided under the CGTMSE scheme when the borrower company provides three months of sales records, the promoter's personal guarantee, and the government covers 75 percent of the default risk.

• Equipment Financing: Equipment financing is a secured loan that helps a business buy or lease business-critical assets such as machinery, vehicles, or technology. For instance, if a manufacturing firm requires around INR 70 lakh for equipment, it can borrow that amount to acquire CNC machines, and repay the sum over 5–7 years. This is one of the most common types of commercial loans offered to businesses.

• Commercial Real Estate: A commercial property loan is used to purchase, develop, refinance, or renovate income-producing business properties such as office buildings, warehouses, retail spaces, etc. For instance, a hotel chain often obtains a commercial real estate loan to renovate its downtown property for INR 2 crore, amortized over 15 years.