Amortization is the process of paying down a loan's principal through scheduled payments over a set period. Each payment covers interest first, then reduces the balance. Early in the schedule most of the payment goes to interest, and the split shifts toward principal over time.
In commercial lending, the amortization period often differs from the loan term. A loan might carry a 25 year amortization but a 10 year term, which sets the payment as if it will be paid off over 25 years while the balance comes due at year 10 as a balloon.
A longer amortization lowers the monthly payment and improves DSCR, which can support more proceeds. The trade off is more total interest paid over the life of the loan and slower equity build.