Many companies and businesses will make use of commercial loans to give them a head-start when it comes to gathering the machinery, resources, staff, and any other financial ventures that will help them prosper in the long term. 

Can You Get A Commercial Loan For 20 Years

Because commercial loans are designed to provide stable funding for a flexible period of time, this can sometimes make it a little unclear how long these loans can actually last, and if they can reach up to 20 years in order for a business to expand and branch out using the loan for that amount of time. 

We have provided a thorough breakdown of commercial loans below giving you everything you need to know, including if it is true that you can have a commercial loan active for 20 years, or even longer. 

What Are Commercial Loans?

In its simplest form, a commercial loan is a mutual agreement of funding established between a business and a financial institution or lender.

These types of loans are often commonly used by smaller businesses that want to get around the obstacle of expensive upfront costs and other financial hurdles that are preventing them from expanding. 

The sum received in a commercial loan will therefore be used by the business to fund capital ventures or operational costs that they will be unable to afford at that time.

Once their application for the loan is approved, businesses will gain access to capital for day-to-day operations, providing much-needed assistance to businesses that are either struggling financially through a certain period, or for brand new businesses that need some assistance getting off the ground. 

Can Commercial Loans Reach Up To 20 Years?

While it can initially seem like commercial loans are more suited for the short-term in funding operational costs there and then, they are actually very flexible and depending on the agreements made between the business and the lender, they can be much longer than this. 

This does mean that many businesses will often take a loan out for anywhere between 5 and 30 years of payments, meaning that using the funds of a commercial loan for 20 years is very common among businesses who feel they would need the financial assistance for that long. 

How Would You Repay A Long-Term Commercial Loan?

The rate at which you pay back a commercial loan depends on what is mutually agreed between both parties, however, in the majority of cases there will be an amortization period where the overall loan is split into separate payments consisting of both principal and interest over a set period which is often longer than the loan term itself.

For example, if a business took out a commercial loan over a term of 10 years, they could agree on an amortization period of 20 years, meaning they would have to pay the loan amount of the 10 years separated over a 20-year period, making the payments easier to manage. 

These payments would then be followed by a final balloon payment which can often cost more than the other instalments and is a final payment that covers the last remaining balance on the loan. 

Over the agreed period, commercial loan payments are most commonly made monthly with interest rates that fall in line with the prime lending rate at the time.

It should be noted however that many lenders will require the business or company to take out insurance on any unique or larger items that are purchased using the money from the loan. 

How To Qualify For Long-Term Commercial Loans

Since a commercial loan is going towards a business and a group of individuals rather than just one singular person, the special requirements can often be a lot more strict and demanding than personal loans in order to ensure that the business seems financially responsible enough to abide by the repayment schedule. 

Can You Get A Commercial Loan For 20 Years (1)

For starters, the company will need to have an excellent credit score of usually 70 or higher.

This is usually considered above the average, and while there are still cases where a bank will lend a commercial loan to businesses and companies that have a slightly lower score than this, it does put you at more risk of being turned away. 

The business will also be required to provide documentation in the form of balance sheets and other pieces of evidence that prove the company already has a favourable cash flow that is projected to grow higher in the future.

If the company is generating no money, or is on the verge of bankruptcy, this will cause the lender to doubt whether loaning out a commercial loan will be worth it. 

Benefits Of Using A Commercial Loan

Commercial loans carry with them a wide number of benefits that can help a business remain financially stable while acquiring all the resources they need to make itself known in the public sphere.

However, there are a few other lesser-known benefits that come with taking out a commercial loan, these include:

  • Lower interest rates – Many commercial loans will have a fixed interest rate, or they are variable meaning you will be able to choose from a range of terms. This makes the repayments far more manageable since your interest rates won’t be spiralling out of control as can easily happen when taking out other loans. 
  • Fixed repayment schedule – Rather than having to repay at awkward times when you might be struggling financially, the company and lender can agree on a fixed repayment schedule, making it easier to budget and giving you more predictability rather than the bank asking for payments spontaneously. 
  • Quick approval – While commercial loans are designated to a company or business rather than an individual and will require a few more documents and pieces of evidence, they still have incredibly quick approval rates with it usually taking no more than a few days or a week until you hear back from the lender. 
  • Flexibility – When applying for a commercial loan, the borrower will have a good amount of say on how and when they pay back, as long as it is within reason. You will also have a much wider range of funding options compared to more traditional loans.
  • Financial Planning – Commercial loan payments allow a business to focus on other important matters such as sales and training staff since the loan will cover the more basic but necessary aspects needed for the business to run well. 


Commercial loans are loans designed to provide a business or company with a reliable cash flow that they can use to fully establish themselves with all the resources, machinery and staff that they need to start making themselves known. 

The good news is that these loans can extend for up to 20 years, and even longer in many cases depending on the lender and their policies, making it a very worthwhile venture for businesses that are hoping to make a name for themselves in the long term. 

The flexibility and lower interest rates make these much more ideal as long-term loans than many other types which can carry incredibly high rates and can quickly spiral into enormous repayment amounts, however, this isn’t the case with the more reliable commercial loan.

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