Commercial real estate loans are often essential for business growth. For example, development companies may build new properties from scratches, such as store plazas, office buildings, and other businesses. Other real estate businesses buy, renovate and sell homes at a profit. Small businesses also have loans available that can allow them to get settled in an attractive headquarters.
What Commercial Real Estate Loans Can You Take Advantage Of?
There are many different types of financing that work for commercial real estate. To decide the best option for your business, you need to consider the amount of money you have available for a down payment, your credit score, equity considerations and the size of your business. Here are a few of the best commercial loans:
SBA 7(a) Loans
This small business loan features excellent interest rates and long repayment terms. Also, you can use 7(a) loans for just about anything, including purchases and renovation. The reason they’re so attractive for small businesses is that the Small Business Administration backs a large portion of loans. This reduces risk and allows lenders to provide amazing rates. To qualify, you need to meet the SBA’s requirements as a small business.
SBA 504 Loans
Another small business financing option, 504 loans or CDC loans let investment companies receive larger credit amounts than the $5 million cap of 7(a) loans. Down payments are less than many other options, and outside collateral isn’t required. With a fixed interest rate and long repayment terms, it’s easy to see why these loans are popular with small development companies.
This type of financing features high capital amounts and fast approval. However, this quick access to cash comes with a higher price tag in interest. Bridge loans are useful for taking advantage of great deals on property and closing quickly. These short-term loans can be useful while you’re waiting for the approval of other long-term financings.
Commercial Mortgage Loans
What if your company doesn’t qualify as a small business? Then a commercial mortgage might be your best option. This financing requires solid credit, but it gives you access to far more capital than SBA loans. For established investment companies, commercial mortgages with or without equity can be an excellent way to maximize business growth while minimizing upfront costs.
How Can You Choose the Best Type of Commercial Real Estate Financing?
Commercial real estate financing can be an incredible tool for growing your business. It can provide the money you need to buy a piece of real estate, build a new structure, purchase an existing building or develop the land. You can also expand, renovate or update different kinds of buildings. To choose the right loan option, you need to consider how you want to use the money.