Lending institutions provide different types of commercial estate loans for different types of properties. Just like housing loan, commercial loans are also secured when the properties are purchased. The terms and conditions of the loan may differ from lender to lender. Some lenders give up to 25 years, and the loan to value ratio will be 80% whereas some will give it for ten years with the loan to value ratio of 65%.
Let
us have a look at the different types of loans for Commercial Real Estate:
·
SBA
7(a) loan
The small business
administration loan or SBI loan is given to purchase land or build a new
property or renovate an existing property. The condition here is that the owner
needs to occupy the property. These loans can be used for up to 25 years, and
monthly payments remain the same until the amount is paid off.
·
SBA
504 Loan
This loan can be
availed for owner-occupied real estate or long-term equipment purchase. These
loans are made up of two different types of loans. Bonus from a certified
development company giving up 40 % of the loan amount and a bank paying 50% or
more of the loan amount.
The borrower needs to pay at least
10 % of the loan amount. The interest rates keep fluctuating between 4% and 5%.
The maximum loan period is up to 20 years and is fully amortized.
Final words
Buying
a property for commercial purpose can put pressure on your pockets and your
bank account. But with the help of right kind of loan, you can get the property
you want in in no time. Small commercial real
estate loan lenders van assist can get the loans at lower interest rates.
If you are searching for the best small commercial real estate loan lender,
feel free to get in touch with us at JBN capital.
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