What is the different commercial real estate loan?

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You must have seen that many people take out a mortgage when they are going to buy a house. Similarly, you can also take out a financial mortgage when you want to purchase a commercial property. Commercial real estate loans Florida allow businesses to buy or carry out renovations in a property with the help of this loan. Majority of the commercial real estate loans available wants the property to be occupied by the owner. This means that the business needs to be physically present in at least 51% of the property. But that’s not all. There are different kinds of commercial real estate loans available in the market. Each of them has been designed for a specific purpose.

Are you aware of all of them? No? Don’t worry we have got you covered. Have a look at the several kinds of commercial real estate loans which you can choose.

Different forms of commercial real estate loan

A wide variety of commercial real estate loans exist which can be bank loans to SBA loans, etc. We will take a look at the most important of them in the options below.

  • SBA 7(a) Loan – Small Business Administration’s flagship loan also known as SBA 7(a) Loan is put into use to buy a plot of land or building or even the construction of a new one or renovation of an old property. Regardless of how it will be used, the only criteria are that the real estate property needs to be owner-occupied. With the help of this loan, you will be able to borrow up to an amount of $5 million and the repayment terms can extend up to 25 years. Moreover, these are amortized which simply means that monthly loan waiver will forever be the same.

  • SBA 504 Loan – apart from the SBA 7(a) Loan, the SBA 504 Loan is also beneficial. It is specifically designed for that owner-occupied property or for the purchase of relevant business equipment. The borrower will need to pay at least 10% as the required down payment. It is compulsory for the SBA 504 Loan. Any borrower will be able to take up to $5-5.5 million as the loan amount. The interest rate of this loan is variable but is usually 4-5%.

  • Conduit/CMBS Loans – there are several banks which offer fast commercial loans and the Conduit/CMBS Loan is one of them. The minimum amount that a Conduit loan will provide ranges anywhere between $1 million to $3 million. Majority of the Conduit/CMBS loans have 20-30 years of the amortization period. Thus, the monthly payment remains the same until the end of the loan term. The rate of interest for this loan is generally much lower than the traditional bank loans and is fixed.

  • Bridge Loan – bridge loans are usually given to shorten the gap until a business is able to secure for the commercial property. However, the repayment period of the loan is short which is generally between 6-8 months and the interest rate is also not fixed like the other loans in the market. Always remember that the interest rate for a bridge loan is a bit higher than the other loans.

So here are the different kinds of fast commercial loans that are made available to you by several financial agencies. All the different kinds of loans that we have mentioned in the above segment are made to help you in different purposes. Therefore have a look at them carefully and they decide which real estate commercial loan is the best for you and your business.


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