Commercial Real Estate Loan Options

You can never have too many options for generating more working capital. As you review the many types of available loans, don’t forget about the possibility of a commercial real estate loan if you own commercial property. As you handle maintenance expenses, leasing costs, and other pressing issues, keep this manner of funding top of mind as it can prove to be quite a helpful tool.

Hard Money Loans

If your back is against the wall financially and you’ve exhausted all other options, consider a hard money loan. Don’t automatically accept foreclosure as a given if times get tough. You can turn to a private lender who may be willing to lend you the money necessary to hold onto your assets. The terms and interest rate will definitely be higher than other forms of loans, but if you’re sure of being able to bounce back, consider this loan type.

Real Estate Purchase Loans

What if you’ve been meticulous with your finances by keeping an excellent credit score and maintaining a lot of savings? In that case, lending institutions may be willing to give you generous terms through a real estate purchase loan. After an appraisal, the lender can figure your interest rate using a loan-to-value ratio because the property will serve as collateral.

Bridge Loans

A way to get money quickly while waiting for another loan to come through is a bridge loan. If getting a loan with better rates is only a matter of time and completing certain necessary steps, a bridge loan can provide what you need to care for expenses while securing funding.

Participating Mortgage Loan

If you have tenants locked into a lease over a long duration, a participating mortgage loan is a win-win for all involved. It gives the borrower a reasonable way to repay the debt and allows for a stable commercial sector in the community because established businesses prefer this borrowing tool. Each month, a portion of sales and rent is given to the lender, so you only have to draw from the money you’ve earned and not be overly concerned about payment. 

Joint Venture Loan

If you have a partner, you can increase loan approval odds with excellent rates by going into the loan jointly. Since you’re already sharing in expenses and profits, why not consider applying for a loan together to boost funds?

Commercial real estate loans come in many varieties and are a great tool to up your working capital. Take advantage of the option that’s right for you.