If you feel the time is right to expand your current space, congratulations on your thriving success. You must go ahead with your decision. In fact, you can even plan on shifting your business to a new location. However, renovations don’t come in cheap, and buying a commercial space can be overwhelming and expensive. Keep reading to know what our commercial real estate loan experts have to say about financing the upgrades.
If you wish to upgrade your commercial property, you ideally have two options. One, save funds over an extended period to eventually pay in cash. Second, take on a commercial real estate loan to speed up the buying process and strike while the iron is still hot. Purchasing a commercial real estate property to either expand your existing facility or set up a new facility is a significant commitment for small and large businesses alike. It is an investment often financed by commercial real estate mortgage. Besides, your access to such kinds of loans will depend on several factors that tend to vary according to the loan source.
Why Should You Take A Real Estate Loan?
The easiest way to answer this question is that purchasing a real estate property can be prohibitively expensive for several small business owners. Debt financing in the form of a commercial real estate loan is one of the few options small business owners have for getting enough capital to renovate or buy a real estate property without breaking the bank. Other options, like a grant or the receipt of venture capital, tend to be complicated and competitive to acquire the required funding. Commercial real estate mortgages can get you any amount of money without much effort.
A critical part of a loan application process is to explain to the lender why you need the amount. Make sure you also consider the expenses and fees related to your loan. Any initiative that is centered on real-estate investment requires careful planning. Your renovation or expansion needs to bring out a return that matches – or even exceeds – what you spent on your loan.
Types of Commercial Real Estate Loans Available
Not all commercial real estate loans are the same. Besides, different agencies and lenders offer a variety of terms. It is in your best interest to talk to an expert who can help you cut your costs by a considerable margin or require a small amount as the down payment (that is, if you qualify). The different types of loans you can apply for include the following:
Traditional Real Estate Loans: The real estate loans offered by banks are the same as other business loans. These loans will typically offer you the most money, with the lowest interest rate than any financing you may find. The only downside of banks’ traditional commercial real estate loans is that it is difficult for most people to qualify for a bank loan. You will have to show excellent business and personal credit and show that the company has been operational with strong margins for a few years.
SBA Commercial Real Estate Loans: Whenever a small business requires an affordable financing solution and fails to get approval from a bank, they often turn to small business administration. The Small Business Administration offers you two different loan options that can be used for real estate. Both of these offer you far more affordable rates than a hard-money lender. Moreover, SBA commercial real estate loans can last up to 25 years, giving you a comfortable repayment period. Our team of professionals from Real Estate Funding Solutions can guide you on the options available to you.
Hard Money Real Estate Loans: Hard money loans are also known as short-term loans for private investors and lenders. These loans are of a smaller amount but with higher interest rates than SBA or bank loans. The advantage of hard money loans is that they come with less stringent qualifications. Any new business that cannot demonstrate a strong credit history but has tangible assets can start with hard money loans.
Commercial Bridge Loans: A bridge loan is a short-term option meant to be paid off quickly or refinanced into a long-term loan. Most business owners take a commercial bridge loan to capitalize on a quick business expansion opportunity. It is more feasible than waiting for a traditional loan to get approved. Talk to a specialist to know more about it.
Get In Touch With Real Estate Funding Solutions To Find A Perfect Commercial Real Estate Loan For You!
Many business owners wish to expand their business to reach newer and greater heights. However, securing enough capital to buy a real estate property is not easy. Looking for an ideal commercial real estate loan to help finance your purchase is the key to expanding your business without emptying the bank. If you have difficulty funding your next commercial property purchase, our professional investment advisers from Real Estate Funding Solutions can help. We have years of experience in the field and can help with your commercial real estate loan right away. Contact us, and we will get back to you with all your loan options within 24 hours.