Cooper Business School

An example of a fixed commercial loan is 3 to 15 years of the loan value. Interest rates are fixed for a number of years and generally tend to be 3, 5, 7, 10 or 15 years. The balance of the loans must be repaid upon maturity and the borrower may refinance or sell the property to repay the commercial loan. An adjustable rate loan is different than a fixed rate loan. The commercial loan adjustable rate implies that rates vary over time. This adjustment occurs in proportion to the current index rate or the previous year. This is an interesting choice of commercial financing. The borrower may choose a fixed term for a period of time, and then a set period for commercial loans. After the fixed rate comes to term, the adjusted rate will continue in the coming years. The rate of a fiscal year is used for this type of adjustable rate commercial loan. Read the rest of this entry »