Types Of Commercial Real Estate Loans & How To Get Them

  • February 19, 2020

Picking the right loan program for your business is crucial for the future of your real estate project, as well as the future of your business overall. It is important to make sure that when picking a loan, it fits your current situation’s needs. There are a lot of options available for types of commercial real estate loans, so it may be confusing where to start. It’s also important to know how these options work into planning a budget. To narrow down these options, you should keep in mind your needs. This will help indicate what types of commercial real estate (CRE) loans will work best for you.

SBA Loans

The Small Business Administration (SBA) is an independent federal government agency that has several loan programs focused on helping small businesses grow by having access to the resources necessary for that growth. Two of the more prominent types of loans offered by them are SBA 504 and SBA 7(a) loans. Knowing which loan is best for your business relies on your needs as well as what the loan itself offers.

SBA 504 & SBA 7(a) Loans

The SBA 504 loan program is typically for real estate improvements, such as any upgrades or upkeep. Purchasing long-term use heavy equipment is another way to use this loan. For real estate, the term length on an SBA 504 loan is 20 years, while equipment financing is 10 years. An SBA 7(a) loan differs in a few ways. They are also used for equipment or machinery, and have a term that varies between 7 and 25 years. This term length depends on how the loan is used. It is also typically used for smaller balance loans.

Construction Loans

Another type of CRE loan available is a construction loan. This type of loan tends to be used for businesses looking to expand on property, such as retail or office spaces intended for multi-use. This is a uniquely structured loan through AVANA capital. They are typically structured to give the business 2 years before monthly principal payments factor in. Construction loans tend to be short-term. AVANA Capital structures construction loans under the SBA 504 program, and they thus need SBA authorization prior to their closing.

Other Types of Commercial Real Estate Loans

Bridge Loans

Bridge loans are a unique type of commercial real estate loan. They are meant for businesses who need to act in a specific time frame. One example of how this loan can be used is when purchasing distressed property. Due to the short timeframe available in purchasing the loan, the bridge loan is structured around that need.

How to Get These Types of Commercial Real Estate Loans

Once you have chosen the type of loan you need, it can still be too confusing to proceed smoothly. AVANA Capital has a plethora of resources available, such as their information on SBA 504 loans, as well as their easy-to-navigate loan builder form on the same page. Submitting this form sends your information to our team of industry professionals in under 10 minutes. Our team specializes in helping small businesses go through the steps of these loans with you so that you fully understand what you will receive from each type of loan. We also provide loans that allow you a long-term repayment schedule (SBA 504), or start construction before principal payments are due (Bridge). Get in touch with AVANA Capital and our team, dedicated to helping small businesses achieve the resources they need, today. We provide you the critical information necessary to choose type commercial real estate loan that fits the needs of your business, as well as unique loans made to help your business grow.

To get more information on types of commercial real estate loans, contact AVANA Capital. One of our industry professionals can provide you with the information you need to guide you to the right type of commercial real estate loan that fits your project’s needs.