Commercial Banking can be quite confusing, particularly because banks tend to use confusing acronyms and often departments aren’t named in a way that the general public can tell what exactly they do.
Take for example C&I Lending and CRE Lending. C&I Lending stands for Commercial and Industrial Lending where CRE Lending stands for Commercial Real Estate.
Both can use business real estate as collateral, but the difference between the two comes from how the revenue is derived by the borrower to pay back the loan. C&I Lending is for businesses like manufacturing or service-based businesses where the revenue to pay back the loan comes from business operations of the borrower. This type of lending usually is for owner-occupied property. CRE Lending, on the other hand, is primarily for developers and landlords where the revenue to repay the loan is derived from rents on the collateral property. This type of loan usually finances collateral such as apartment buildings, office buildings, and retail centers.
In a nutshell, the way the income is d
erived tells you what department will likely make the loan.