Commercial real estate loans are a vital piece of the puzzle for many businesses. Whether you're looking to purchase property, refinance an existing loan, or need some extra cash flow to grow your business, there's a commercial real estate loan that will fit your needs.
This post will discuss the types of commercial real estate loans and what to check for when shopping around for a loan.
1) Bridge Loans
The loan is a short-term loan used to finance the purchase of new property before the sale of an old property is complete. For example, bridge loans are typically used when buying a new commercial space before selling your old one.
Bridge loans can be a great option if you're looking for a quick and easy way to finance your new property purchase. However, because they are short-term loans, they often come with higher interest rates than other loans.
If you're thinking about taking out a bridge loan, shop around and compare interest rates from Houston's best private money lenders.
2) Construction Loans
Construction loans are a type of loan used to finance new commercial property construction. Construction loans are typically short-term loans, ranging from six months to a year.
Construction loans can be an excellent option for businesses building their own commercial space. However, because they are short-term loans, businesses need to be sure that they will have the necessary funds to repay the loan within the specified time frame.
Construction loans can also finance renovations or expansions of existing commercial buildings. Commercial real estate loans in Houston are the best choice for renovating your office property.
3) Small Business Administration (SBA) Loans
The Small Business Administration (SBA) is a federal government agency that supports small businesses. One of the methods the SBA supports small businesses is by guaranteeing loans made by the best private money lenders in Houston to small businesses.
SBA-guaranteed loans are available for a variety of purposes. Some of them are:
- To purchase commercial real estate
- To refinance debt on commercial real estate
- To make improvements to commercial real estate.
For a loan to be SBA-guaranteed, it must meet specific criteria. For example, the loan must be for a small business and cannot be used for certain businesses, such as investment or speculation.
In addition, the loan must be made by a lender that is participating in the SBA program. Not all lenders participate in the SBA program.
Final Thoughts
In conclusion, it is vital to be aware of the different types of commercial real estate loans available to make a decision for your business. Each type has its benefits and drawbacks, so it is essential to consult with a financial advisor to ensure that you make the best choice for your particular situation.
