Commercial Risk

See Also:
Commercial Paper
Personal Credit for Commercial Loan
How to Select Your Commercial Insurance Broker
Commercial Agents
Forensic Audit
Investment Risk

Commercial Risk Definition

Commercial risk is defined as the risk a company takes by offering credit with no collateral. It is a common term in the business world. Any time a company offers credit, be it trade credit, credit terms like 2/10 net 30, or other, they are essentially offering financing with no collateral. In this situation, the company is taking a commercial risk. You may need solutions.

Commercial Risk Explanation

Explained as the risk a company takes with it’s customers, it is a common risk of doing business. Most companies allow credit terms. So, almost every company must take on some form of commercial risk. Analysis of this is often professionally evaluated by companies, like insurance providers, who must make sense of the commercial risk of a company to do business. Management effects the company as well as insurance providers, investors, lenders, and more.


For example, Logan is the owner of a company which provides oil pipes to energy companies. His work, extremely technical, is a good fit for his personality.
Logan wants to change insurance plans. For this, he will need an assessment. He has his CFO pull up the figures on trade credit so he can provide this to the insurer.
Next, Logan wants to take out a bank loan. To do this he will need the same figures. The bank wants to measure the risk of Logan’s business failing. Commercial risk is a good part of this.
Logan very much appreciates his CFO now. With these figures in hand he can complete his work. This way, Logan can get the support he needs to continue his business.
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commercial risk
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commercial risk


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Mining the Balance Sheet for Working Capital Let’s face it… There has been significant liquidity in the marketplace over the past couple of years. Debt and equity capital has been relatively easy to find and commercial banks have been very willing participants as capital providers; however, many of the commercial banks have admitted that this robust marketplace

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Is Your Business Bankable?

Businesses call us for many reasons but here are two very common reasons why we get called… They are growing and want to strengthen the financial function. OR They are in financial distress and can’t find a way out. Why does a business need to be bankable? What does being bankable mean? In this blog,

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It happens all the time. Companies need capital, but they aren’t bankable. Banks or other financial institutions will not touch them because they are either too risky, not able to meet covenants, or it just doesn’t work out for some reason. So, where do those companies go? They need to look at alternative forms of

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