Buying Commercial Real Estate

Traditional commercial mortgages: These loans are offered by banks and other financial institutions and are secured by the commercial property being purchased or refinanced. Interest rates can be fixed or variable, and repayment terms typically range from five to twenty-five years.

Small Business Administration (SBA) loans:  These loans are guaranteed by the SBA and can be used for a variety of purposes, including purchasing or refinancing commercial real estate. The maximum loan amount is $5 million, and repayment terms can be up to 25 years. Interest rates are typically lower than traditional commercial mortgages.

SBA 504 loans: These loans are also guaranteed by the SBA and can be used to purchase or refinance fixed assets such as real estate or equipment. The loan is split into two parts: a first mortgage from a commercial lender and a second mortgage from a Certified Development Company (CDC) backed by the SBA. Repayment terms can be up to 25 years, and interest rates are typically lower than traditional commercial mortgages.

Hard money loans: These loans are typically offered by private lenders and have higher interest rates than traditional commercial mortgages. They are often used by borrowers who cannot qualify for traditional financing due to poor credit or insufficient collateral.

Private equity loans: These loans are offered by private equity firms and can be used for a variety of purposes, including real estate acquisitions and refinancing. The terms and interest rates of these loans vary widely depending on the lender and the borrower’s creditworthiness.