Are you considering purchasing a commercial property, such as an office space or a warehouse? Maybe you are looking to renovate your existing commercial property or wish to refinance your debt. No matter what it is, commercial real estate loans in NJ can be an ideal solution to all your financing problems. In this article, the Real Estate Funding Solutions team will walk you through the primary types of commercial property loans to help you understand what fits your needs the best.
Primarily, there are three types of commercial real estate loans in NJ that you can choose from as a business owner. These include term loans, SBA commercial real estate loans, and business lines of credit. These are ideal when you need quick funding or bridge gaps in your long-term financing. Such commercial real estate loans vary in their terms, rates, and funding period. Based on your qualifications and the needs of your business, one type may work better than others.
Term loans are one of the most popular forms of commercial real estate loans amongst business owners, and for a good reason. These are what most people think of when imagining a business loan or any other type of loan, for that matter. Term loans can provide you with a lump sum capital that you can repay over regular installments. Term loans for commercial property financing offer you long repayment periods, typically up to 5 or more years. Such loans also come with an amortization period which can also be longer than the full term of your loan.
Interest rates and funding amounts tend to vary depending on the type of property you are looking to finance, the total money you are ready to put in as a down payment, and your personal financial criteria. Online lenders, traditional banks, and commercial real estate lenders offer term loans. Several lenders have their qualification requirements for this type of real estate financing. Generally, it is more complex to secure funding from a big financial institution like a bank. Online lenders, however, can be much more lenient, especially when it comes to down payment amounts, credit scores, business and personal financial history, and more.
Small Business Administration Loans
Small Business Administration loans are government-backed loans. In other words, the government agrees to cover some portion of your outstanding balance if you default on your payments. This gives real estate lenders some extra security which often translates to a lower interest rate on your end. Such loans are the best for financing a commercial property since they have a low-interest rate and offer longer repayment terms. Though you can use commercial real estate loans in NJ to cover almost all kinds of business expenses, they are most commonly used for real estate financing. If you wish to qualify for such funding, your business must meet a few requirements. It would be best if you met the following criteria:
- Owners must have invested equity
- Demonstrable need for financing
- For-profit business
- No outstanding debt to the U.S. government
- Located and operated within the country
- Business owners can’t be on parole
You must clearly understand what you are signing up for when going for a Small Business Administration loan. There are two primary types of SBA commercial real estate loans that allow you to secure commercial real estate financing. The first one is the SBA 504 loan, and the second is SBA 7(a) loan. When you contact our team from Real Estate Funding Solutions, they will explain both these types of loans in detail. Remember, it’s vital to make an informed decision, especially for a commercial loan.
Business Line Of Credit
One of the most common forms of commercial real estate loans in NJ is business lines of credit. These loans are often compared to credit cards. Even though these loans work similarly, business lines of credit often feature a higher funding amount and a lower interest rate. Moreover, just the type of funding is also very flexible. A business line of credit allows you to use and reuse your borrowed capital as you see fit. You will be granted a set credit limit, which you can easily borrow from as needs arise. The only downside of this form of funding is that you don’t have a fixed repayment schedule. There are even times when their interest rates could be higher than standard loan terms. Nevertheless, their overall flexibility helps make up for all these drawbacks.
Want More Information? Contact Real Estate Funding Solutions Right Away!
If you are unsure where you must start looking for a commercial real estate loan or what kind of lender to work with, you must get in touch with the Real Estate Funding Solutions team right away! Our experts can help you connect with several lenders as soon as you apply. Moreover, our team can help you gather all critical documents and will stick by your side till the end of your loan term. Call us today at 855-913-8637 for more information.