Commercial
Common Types of Commercial Loans
Permenant Loan
A permanent loan functions similarly to a residential mortgage and serves as the primary loan on a commercial property. It typically comes with a minimum repayment term of five years and is considered a conventional, long-term financing option.
Small Business Administration
(SBA) Loans
The SBA offers a variety of loan programs through approved lenders, designed to support small businesses in acquiring commercial real estate. Two of the most commonly used SBA loan options include:
– SBA 504 Loan
This program offers long-term, fixed-rate financing for owner-occupied commercial properties. Loan proceeds can be used for purchasing real estate, refinancing existing debt, and covering certain soft costs. SBA 504 loans often require a lower down payment compared to traditional commercial loans. For real estate transactions, the repayment term can extend up to 25 years.
– SBA 7(a) Loan
Designed for higher-risk financing needs, the SBA 7(a) loan can be used for both property and business acquisitions. These loans generally have adjustable interest rates tied to the prime rate and may come with higher upfront costs than SBA 504 loans. The maximum repayment term for real estate under this program is also 25 years.