Commercial property loans are loans made using real estate as collateral to secure repayment.

Like residential property loans, a building will be used in order to secure repayment from the debtor except the collateral is a commercial building instead of a residence. Usually a business will take on a commercial property loan, rather than an individual.

The borrower can be a corporation, limited liability company, or even a partnership. This makes the assessment of the credit of the buyer much more difficult than it is with residential property loans.

Some commercial mortgages are nonrecourse, that is, that in the event of default in repayment, the creditor can only seize the collateral, but has no further claim against the borrower for any remaining deficiency. The general reason for this is twofold: many laws significantly prevent the creditor from going after the borrower for any deficiency, and mortgages structured for sale as bonds give a higher priority to constantly receiving some sort of income and therefore require a clause which allows the lender to take the property immediately, regardless of bankruptcy proceedings that the borrower might be going through.

Frequently, the commercial property loan is supplemented by an obligation of the borrower or a guarantee from the owner(s), which causes the debt to be payable in full even in the event that foreclosure on the mortgaged collateral does not satisfy the outstanding balance.

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Take a look at Egypt property to find out more about investing in property there.

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