Bank Loan News: Consumer or Commercial?
RAPID CITY, S.D. (KEVN) -There can be big differences when it comes to commercial and consumer loans. How do decide between the two? According to Josh Horak, President of First Interstate Bank, it all depends on the use.
Horak said, “the biggest difference is that commercial loans, or business loans, are tied to the business instead of an individual.” This means that the company is responsible for its debt and creates a separation between your personal finances and any business finances. Additionally, business loans are usually tied to a specific use such as purchasing equipment or inventory, payroll, location costs, etc.
Now when it comes to consumer loans, Horak said “personal loans are tied to an individual, generally for personal use.” Consumer loans include car loans, credit cards, mortgages, and more. Another big difference between the two would be that a personal loan will report to your consumer credit report, where most business loans do not.
Like any financial decision, do your research and speak with a commercial lender to navigate your specific needs.
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