Leah Smith
FIN4345
September 15th, 2020
When it comes to loans, there are two main types—consumer and commercial. Both are
very different and serve a different purpose. Consumer loans are for personal use and usually
include mortgages, car loans, boat loans and even credit cards. Commercial loans are strictly for
business related expenses such as for a business property or purchasing commercial equipment.
Ironically, consumer loans tend to be more complex and have a tougher acceptance rate.
Throughout this report, I am going to break down the major differences between consumer and
commercial loans. Also, I will explain the different types of commercial loans.
Consumer loans are obviously issued to consumers. The application and approval process
is more difficult than a business loan mainly because individual loans are not intended for people
to buy things with big sums of money—they are not within the same scope of what businesses are
looking for within a loan.
