Commercial banks

The next type of bank we have is a commercial bank.

These banks are primarily for businesses, but individual consumers can also bank at commercial institutions.

Commercial banks provide small and medium-sized businesses with access to basic banking services.

Compared to retail banks, commercial banks incur slightly more fees and costs, but they offer more financial services and products.

The economic purpose of commercial banks is to create capital, credit and stimulate liquidity in the marketplace.

Here are some of the products and services offered by commercial banks:

• Various Loans: Commercial banks can provide many different types of loans for different purposes. These loans include business term loans, commercial loan options, refinancing and commercial mortgage loans.
• Cash Management Services: Commercial banks offer cash management solutions ideal for large businesses. These services include market liquidity assessment, cash flow management and investment management.
• Various Loan Products: Various types of lines of credit can be opened through commercial banks, many of which are suitable for business purposes.
• Equipment Loans: Commercial banks typically offer equipment loans, leases, or equipment financing to their customers. Essentially, these are loans that businesses can use to purchase needed equipment. These equipment loans can be repaid through recurring monthly payments over a fixed period of time.
• Trade Finance: Commercial banks can significantly reduce international trade risk through trade finance. The bank can act as a third party who settles any disagreements between the exporter and importer.
• Commercial Real Estate: Commercial banks often own properties that can be rented out to tenants for income generating activities. These properties can range from a typical store to an entire shopping center. Most malls, retail stores, restaurants, and office space are likely to be owned by commercial banks.
• Foreign Exchange Services: Commercial banks support currency exchange and conversion. This, combined with trade finance, makes commercial banks ideal for conducting international business.
• Notary services are also included.
• For business purposes, both large and small can benefit greatly from banking through a commercial bank.

If a business needs to open an account, obtain a loan of any kind, access a line of credit, or convert funds for foreign markets, commercial banks are the way to go.