Commercial Real Estate Loan Options

Improve your real estate options today with dynamic commercial real estate financing. A commercial property loan comes in many forms, so you need to understand your financing options in order to receive the best option for your real estate project. Here are some basic loan types available to you.

The most common type of real estate loan is a purchase loan. This business loan gives you the financing you need to secure the property. Typically a mortgage, this type of loan doesn’t allow you to take out additional financing for other expenses but can be large enough to purchase major commercial properties. Unlike a traditional mortgage, your commercial loan may come with a balloon payment, rather than an amortized one.

If your balloon loan payment is approaching, or you need to free up more financing for another investment opportunity, another commercial loan option is a refinance loan. This leverages the available capital in your commercial property and gives you a flexible loan you can spend on renovations, business expenses and more.

When you’re struggling to become approved for a traditional business loan, consider a hard money loan for your commercial real estate investment. Hard money loans give you the financing you need to purchase a property and make any necessary renovations. When you’ve restored the property, or adding improvements, you can easily refinance it and take out a commercial mortgage. A hard money loan is also known as a bridge loan and offers excellent flexibility. However, you’ll typically have a high-interest rate and short-term repayment plan.

A specialty option for commercial properties is a fix-and-flip loan. This unusual loan is used specifically to purchase, remodel and quickly sell a property. Whether you’re using it for a single-family home, multi-family unit or commercial property, the goal is to quickly improve the value and sell the home.

Whether you choose to take out a traditional mortgage or choose one of these other options, it’s important to understand what it takes to be successful as a commercial property investor. Not only do you need an eye for the best properties on the market, but you also need to have enough money for a down payment and a solid credit score. Without a strong credit score and business plan, you may struggle to receive many of these financing options. Once you build up your score and craft an excellent business plan, you’re ready to apply for a commercial real estate loan for your next investment opportunity.

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