Commercial Real Estate Loan Options

While starting out a new business is exciting, many company owners find themselves struggling when it comes to setting up a location. Many don’t know where to acquire commercial real estate or how to get started finding a location to base their business. Thankfully, there are several loan options that make this possible. Learn more, and discover which one is best for your needs.

Check Out Options Banks Offer

This is one of the most common ways for folks to get a loan for commercial property. While banks are the ultimate go-to, it’s important to know how the process works. Individuals taking out a loan for a commercial property need to have a good credit score and plenty of documentation to support why they deserve a loan. The rates banks offer are the lowest, with terms lasting anywhere from one year to twenty-five. 

Use Asset Based Options for Commercial Real Estate

Asset-based loans are best described as working capital loans. The commercial real estate that is getting purchased is used as collateral. These come as either a term loan or a line of credit, providing options for the purchaser. Another benefit is they can take as little as three weeks. Rates are anywhere from eight to thirty-five percent and the terms usually go up to three years.

Learn About the SBA and How to Utilize It

The SBA is best known as the Small Business Administration, and it offers many different financing options for real estate loans that are used for commercial purposes. It can either be used for a purchase or refinance something. Terms can go up to twenty-five years with rates up to eight percent. The only downside with this option is that it’s very similar to a bank, requiring near-perfect credit and plenty of proof for the loan.

When seeking out a loan for commercial real estate, it’s important to know what options are best suited for the company’s needs. While choosing a bank loan is the normal go-to, there are other options that can provide better rates, such as loans from the SBA. Finally, asset-based options allow new business owners the choice to use either a term loan or a line of credit, allowing them flexibility in their business needs. Knowing what choices to seek out before applying for a loan can make the overall process simplified for busy company owners.

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