Businesses require an adequate amount of capital to fund startup expenses or pay for expansions. As such, companies take out business loans to gain the financial assistance they need. A business loan is debt that the company is obligated to repay according to the loan's terms and conditions. A commercial loan is a debt-based funding arrangement between a business and a financial institution such as a bank. ... This means that, not unlike individual consumers, smaller businesses must rely on other lending products, such as a line of credit, unsecured loans or term loans.