Commercial Real Estate Financing Options to Fund your Next Acquisition

When deciding which loan is best, there are many options. Here are five common business loans you can use to secure financing.

SBA 7(a) Loan

This allows you to borrow up to $5 million for a term of 25 years. The funding time is 60-90 days. This type of loan is best for established businesses who are looking for a long-term owner-occupied commercial loan of up to $5 million. However, businesses must have a credit score of 680 and a DSCR of 1.25. They must also be a minimum of 51% owner-occupied and have two years of operation.

CDC/SBA 504 Loan

This loan allows you to borrow up to 90% of the purchase price in a loan term of 10-20 years. The funding time is 60-90 days. This type of loan is best for established businesses who have been in operation for a minimum of three years and who are looking for a long-term owner-occupied commercial loan with no maximum loan amount. Businesses must have a credit score of 680 and DSCR of 1.25. In addition, the organization must be at least 51% owner-occupied.

Traditional Mortgage

This loan allows you to borrow up to 85% of LTV for a loan term of 7-30 years. The funding time is 30-90 days. This type of loan is best for established businesses in operation for a minimum of three years and who are looking for a long-term owner-occupied commercial loan with no maximum loan amount. It is also effective for businesses with very good credit since the minimum credit score is 700. Organizations must have a DSCR of 1.25 and be at least 51% owner-occupied.

Commercial Bridge Loan

This loan allows you to borrow up to 90% of the purchase price for a loan term of 6-36 months. The time to funding for this type of loan is 15-45 days. This type of loan is best for businesses seeking short-term owner-occupied financing. The loan requires a minimum credit score of 700 and a DSCR of 1.1. Organizations must have a net worth equal to the requested loan amount and have a history of one to three prior projects.

Commercial Hard Money Loan

This loan allows you to borrow up to 80% of LTC or up to 90% of LTV for a loan term of 1-3 years. Time to funding for this type of loan is 10-15 days. This type of loan is best for businesses looking for short-term owner-occupied financing for renovation financing or for business owners with poor credit. The credit score required for this loan is lower than others at 600. In addition, the loan requires a history of one to three projects. There must also be proof of down payment.

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