Commercial & Industrial (C&I) loans, also known as business loans, are loans designed for large corporations,
joint ventures, and commercial enterprises. Unlike
Unsecured Loans or
Demand Loans which can be applied to both business and consumer, C&I loans are solely meant for
large commercial enterprises. C&I loans are generally flexible-rate (tied to prime or money markets), short-term loans and can be
secured or unsecured, depending on the borrowers need.
Secured Loans require some form of collateral where-as
Unsecured Loans are given in good faith based on the banks trust level of the borrower or
strong credit history. Once a C&I loan is made, businesses may use it as a source of working capital or to finance purchases
of new equipment, manufacturing plants, and real estate. Borrowers may be required to submit annual or bi-annual financial
statements to their lending institution, and meet other conditions such as maintaining proper insurance on the loan collateral.
Commercial & Industrial loans are a key line of business for banking and lending institutions, accounting for as much as 18%
of all bank assets and liabilities.