Commercial Real Estate Loans
Are you looking for money to renovate or purchase a property? A commercial real estate loan can finance that for you. All properties that generate income can be used to get commercial real estate loans. Business owners can access this loan with the best rates in the markets from Commercial Real Estate Loan Pros of St. Petersburg. Commercial loans tend to undergo more audits because of the high risk coming from small enterprises.
Repayment periods are relatively shorter compared to residential mortgage loans. For instance, a commercial loan may take up to 20 years to repay compared to a 30-year payment plan for a residential loan. Therefore, early repayment penalties are higher in commercial loans to protect the lender’s final take.
Types of commercial real estate loans.
The three main types of commercial real estate loans which require the business to occupy at least 51% of the premises, firm business plans, and repayment schedules of up to 20 years are as follows:
Traditional commercial mortgage loan.
The government does not support this type of loan. Therefore, the lender decides the maximum limit of the loan as the loan has no cap. Loans are usually exclusive between the bank and the lender. The loan amount is typically regulated at around 60% to 85% of the property’s loan-to-value, with a deposit of between 15% to 35% of the property’s market value. It would be best if you made loan payments monthly with interest rates ranging from 4.7% to 6.7%. Commercial lenders have higher qualification merits since the government does not support this loan.
SBA 7 (a) loan.
The government supports SBA (Small Business Administration) loans, unlike traditional commercial mortgages. Interest rates are lower with SBA loans as with the credit ratings, but qualification is more illiberal. SBA 7 (a) loans are most commonly compared to other SBA loans. You may use an SBA loan to purchase a new property or use it as operating capital. The maximum amount for this loan can go between 85% to 90% of the buying price, with 10% to 15% deposits. Interest rates vary between 5% to 8.5%. Repayment periods are usually between 10 to 25 years.
CDC/SBA 504 loan.
They are precisely drafted for purchasing commercial properties. 40% of funds come from a CDC (community development corporation), 50% comes from a bank, and 10% from the borrower’s deposit. This loan does not have the highest amount one can borrow. Being supported by the government, the lender requires you to have high credit scores and meet the CDC’s requirements. The SBA monitors and establishes rates, terms, and fees for the CDC, regulating fixed interest at 5.07% for 20-year loans and 4.85% for 10-year loans. CDC/SBA 504 loan interest rates are as low as 3.5%, with a CDC activity fee of 1.5%.
Factors for getting a commercial loan.
Five main factors lenders look at before approving your loan are business experience, income, liquidity, credit ratings, and net worth. Suppose you need to get a commercial real estate loan. In that case, you should: assess your financial situation, do thorough research about these types of loans then consult Commercial Real Estate Loan Pros of St. Petersburg for any advice.
There are so many areas or regions where we offer these services with most of them being cities.
However, if you need any of these services, you need to contact us. The list below comprises the areas where we offer these services.