Commercial Real Estate Loans: What Products Are Right For You?

Everyone expects to need a commercial real estate loan when they open a business, but do they know what kind to get? Knowing the types of loans available can be helpful to know as you get started and just in case something happens.

Deciding you want to go into business for yourself is a pretty big deal. No longer will you have to answer to the beck and call of a superior. You will be the superior that everyone else answers to, brings problems to, and expects to have all the answers.

Not only will you need to have all the answers, but you will need to have money. Getting a business off the ground takes money; money that most people will get through commercial real estate loans from their bank.

Yes, there are different types of loans.

Understanding the Different Types of Commercial Real Estate Loans

There are different types of loans you can apply for through your bank. Each has various aspects that are necessary to know and understand:

Bridge Loans are short term loans borrowers can apply for when they need cash right now to cover expenses. They are typically short-term loans through private lenders who will require proof of income and an excellent credit score.

Real Estate Purchase Loans are the loans you take out to purchase your building, store, or office. These can come with fixed or adjustable rates, will require the borrower to have excellent credit and significant savings in a business and personal account. The commercial property itself will need to be used as collateral.

Hard Money Loans are for when an infusion of cash is needed sooner rather than later, often to save the business or keep it afloat. Since they are given when a business is in dire need, they often come with a higher interest rate to compensate the lender for taking on greater risk.

Joint Venture Loan are what want if you are going into business with a partner. They are common when neither party can receive approval on their own but by applying together, they can make a better case to the lender.

Participating Mortgage is a type of loan gives the lender a chance to enjoy the success of the business. When payments are due, the borrower will send a percentage of the income earned as well as payment. This kind of relationship is more common between lenders and long-term, financially stable borrowers.

How Does Knowing the Different Type Of Commercial Real Estate Loans Help You?

When you go into business, you will have a plan, and a few contingency plans to help you deal with whatever problems or issues that may arise. More often than not, challenges and problems will require some sort of financial commitment.

If you have the cash on hand—great, but if not, it can be nice to know there are different types of commercial real estate loans that may help you.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    

   

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.