What are the loan options for commercial investing?

On Behalf of | Jan 22, 2021 | Real Estate Transactions | 0 comments

Keeping a good money flow is important in commercial investing. You always need to have a plan for where you with get financing when you find a new property because you often have to act fast to avoid losing a property or to get the best deal.

Business News Daily notes that you have three main options for commercial real estate financing.

SBA loan

The Small Business Administration does offer specific loans for commercial investing. The 504 loan program can be an option for you if you find it difficult to secure funding through other means. Do note that you will have to meet SBA requirements to get the loan.

Line of credit

If you have a property with built up equity, you can secure a line of credit. It is nice because you can use it as you need it. Plus, it is your money. You are tapping into the equity of property you already own. It is also easier to get a line of credit than a loan and allows you much quicker access.

Portfolio loan

If you own multiple properties, your lender may allow you to get a portfolio loan. The biggest challenge with this type of funding is that it is widely up to the lender to determine every aspect of the loan, including the terms and how you qualify.

Traditional bank loan

The most common option for funding is a traditional bank loan. You will have to qualify based on your credit history. Usually, the bank requires that you show stability in your business ventures. It is helpful to have a good relationship with your bank as well. You will have to complete a lot of paperwork, and the process can take a bit of time to finalize.