Types of commercial real estate loans
Traditional commercial real estate loan from a bank: offer the most money, with the lowest rates – but, it’s difficult to qualify.
Small Business Administration commercial real estate loans: affordable financing if you don’t qualify for a bank loan. The SBA has two loan options: that may be used for real estate: The SBA offers a general purpose 7(a) loan program and the 504/CDC loan program. The 504/CDC loan is the better choice, with interest rates starting at around 5 percent, compared to 7 percent to 10 percent for 7(a) loans. Payment terms that can last as long as 25 years.
Hard money real estate loans: Short-term loans from private lenders and investors, usually for a smaller amount, and with higher interest rates than a loan from a bank or the SBA, but have less stringent qualifications.
Commercial bridge loans: A short-term loan that is meant to be paid off quickly or refinanced into a longer-term loan.
Commercial real estate crowdfunding: many small loans or donations from lenders and investors can achieve an amount similar to a hard-money loan.
Do I qualify for a commercial real estate loan?