![]() ![]() They’re typically about 0.5% to 1% higher than the 30-year prime rate for mortgages.Ĭurrently, rates range from 3% to 20%, depending on the exact type of loan, property and your personal financial profile. Todays mortgage rates on commercial real estate loans tend to be higher than those for residential loans. Bridge loan: These loans work as short-term financing solutions for when you need cash flow to improve or refinance an existing property or work on getting longer-term financing.Ĭommercial Real Estate Loans: Rates and Fees.Though the approval process is often more lenient, the costs can be much higher. Hard money loan: These loans are provided by private companies and are designed for borrowers who can’t qualify for traditional financing.Small Business Administration (SBA) loan : These loans include two main commercial loan programs offered through the SBA-7(a) loans and 504 loans. ![]() It involves some amortization and has a term of at least five years. Permanent loan: This is essentially a first mortgage on a commercial property.Some common types of commercial real estate loans include: The exact terms of a commercial real estate loan depend on the specific type of loan, lender, property financed and more. In the case of a commercial loan, the lender removes the lien once the loan is paid off. A lien is a legal claim to a property that can be used as collateral if a loan goes unpaid. One of the main differences is that the loan is secured by a lien against the commercial property rather than a residential property. How Commercial Real Estate Loans WorkĬommercial real estate loans work similarly to mortgage loans for personal real estate. Most of these loans require that the property is owner-occupied, meaning your business resides in at least 51% of the building. Often, CRE loans are made to a business entity such as a corporation, developer or trust, though an individual can borrow one as well. A CRE loan can be used to buy new property, renovate existing income-producing property or refinance debt on a commercial property you already own. On National Funding's Website What Is a Commercial Real Estate Loan?ĬRE loans exist to finance property that’s used for business-related purposes, such as shopping malls, warehouses, apartment complexes and office buildings. ![]()
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