What is a Corporate Loan?
A corporate loan, also known as a business loan or commercial loan, is a type of financing provided by a financial institution to a corporation or business entity. Corporate loans are typically used to fund various business activities, such as expansion projects, capital expenditures, working capital needs, inventory purchases, equipment acquisition, or other operational expenses. Corporate loans include capital investment, company expansion, working capital, administrative, and operational costs. For example, imagine a small company that wants to expand by opening an office at a new location. They need money for renovations, new furniture, and extra staff. They apply for a corporate loan from a bank and receive ₹50 lakhs to fund these expenses.
Key Takeaways:
- Corporate loans may be secured or unsecured, meaning they may require collateral or be based solely on the creditworthiness of the borrowing company.
- The terms of corporate loans, including interest rates, repayment schedules, and loan amounts, vary depending on factors such as the borrower’s credit history, financial strength, industry risk, and the lender’s policies.
- Corporate loans are an essential source of funding for businesses of all sizes, helping them manage cash flow, invest in growth opportunities, and meet their financial obligations.
Table of Content
- Features of Corporate Loan
- How does a Corporate Loan Work?
- Types of Corporate Loan
- Eligibility Criteria for Corporate Loan
- Documents Required to Apply for Corporate Loan
- Top Banks and Financial Institutions that offer Corporate Loans
- Conclusion
- Corporate Loan – FAQs