When it comes to selecting the commercial loan, you should understand what types of options are out there. Here are some of the most common options:  

• SBA 7A Loan – The U.S. Small Business Administration (SBA) offers some of the least expensive loans for investing in commercial real estate, and guarantees repayment of a portion of the loan. SBA-backed loans help the borrower by increasing credibility and reducing risk for the lender.  

• SBA 504 Loan – he 504 loan program works best for larger investment projects, such as those valued over $1 million. The investor must put down 10 percent of the loan amount as the down payment, while 40 percent of the loan is sourced from an SBA Certified Development Company 

• Conventional Bank Loan – A majority of commercial real estate loans are made by banks, who prefer to lend to entities with strong credit histories. Individuals with a credit score of at least 660 and are working with mid- to large-sized projects will find conventional bank loans as a viable commercial real estate financing option.  

• Hard Money Loan – For investors looking for a quick solution to commercial real estate financing may look to a hard money loan. Hard money lenders usually offer short-term loans at high interest rates, and evaluate the loan based on the perceived value of the property and not on the borrower’s credit history. 

Some key takeaways to remember:  

Commercial real estate loans are not always the easiest to secure and require more diligence, preparation and paperwork than most residential loans.  

1. Plan and prepare accordingly 
2. Understand the difference between residential and commercial loans 
3. Explore all of your available loan options 

Interested in exploring what commercial property loan options lie ahead? Let’s talk! 

We would be happy to discuss available options and decide on the best commercial property loan for you!