Commercial real estate loans aid investors in purchasing properties including hotels, retail establishments, industrial facilities and multifamily units. Those who are looking for this type of loan will need to understand all of their lending options. Varieties of commercial loans are available, dependent on the type of property being purchased. Business acquisition loans, conduit loans and bridge loans are just a few examples of terms that can overwhelm a first-time investor.
Government guaranteed loans
Government guaranteed loans are those guaranteed to lenders by the United States Small Business Administration. These aid businesses that may not be otherwise qualified for a loan and offer more affordable financing and easier qualification standards.
Conduit loans are commercial real estate loans used to acquire or refinance properties such as industrial, hotel, offices, self-storage and other similar types of properties. They offer a low, permanent fixed rate.
Business acquisition loans
Business acquisition loans are those designed to aid a business in taking over or merging with another business. They may include real estate. Those with real estate included have a loan up to 25 years.
Income property loans
There is a wide range of income property loans available. These loans are specifically designed to handle commercial real estate purchases in which the loan sizes range from $2 million up to $100 million. As the name implies, these types of properties generate income for the buyer. Property types often determine the type of loan obtained.
A bridge loan is a type of loan obtained by a business to keep up with funding needs until a more permanent loan can be found. These are short-term loans, often based on the equity in real estate the business has, or from some other form of collateral. These loans remove the existing obligation from the property.
Commercial construction loans
Commercial construction loans provide businesses with the funds needed to build property such as office buildings, retail centers or industrial facilities. These loans are approved through a special process often requiring an in-depth understanding of the surroundings and profit potential.