Everything You Need to Know About Commercial Real Estate
Commercial real estate is a good industry in which to invest. Even when the economy goes into a recession, CRE often holds its value and continues to bring in income on the property. Commercial real estate focuses on properties that are used for business purposes.
Whether you’re an investor or small business owner, you should understand the different types of loans available for commercial real estate.
- Traditional bank loans are a good form of financing for commercial real estate. If you have good credit and documentation of your business, you can usually get good rates and terms. However, you may find this process to be quite lengthy.
- SBA financing is a great opportunity for small businesses to get access to financing. The Small Business Administration backs loans rather than actually issuing them. This reduces the risk to lenders, which lets them offer better rates and terms on financing for small businesses. The tradeoff is that you need really good personal credit. The paperwork can be overwhelming and take time to process. It’s not easy to get an SBA loan for commercial real estate, but it does help your bottom line.
- Asset based commercial real estate loans use the value of the property as collateral, making this type of loan a little easier to qualify for. You will need to have an appraisal of the property. You may even need to provide documentation for the building’s income. The term for this type of loan is generally shorter than traditional financing, just 1 to 3 years, but if you need working capital for improvements, it can be a good option.
Commercial Real Estate Is Booming
Technology is shaping the future of commercial real estate. Mortgage lenders are using software to speed up the financing process. Developers are using virtual reality (VR) to showcase properties and in renovation projects. You have access to real-time data for property management. Contact the lending specialists with Commercial Capital Lending for information on loans to finance your next venture.