Investment Property Loan

Types of Commercial Investment Property Loans

There is a wide range of commercial investment loan types. Each type of loan has unique eligibility requirements, such as a minimum credit score, experience level, and down payment requirement.

Connect with our team to discuss your project or situation, and we can provide recommendations and options available to you!

Small Business Administration (SBA) 7(a) Loan

The U.S. Small Business Administration offers several loans under the 7(a) umbrella, each of which is designed to provide financial assistance for small businesses.

Certified Development Company (CDC) / SBA 504 Loan

The 504 Loan Program is another SBA product made available through Certified Development Companies (CDC). These loans are specifically intended to stimulate business growth and job creation by offering small businesses yet another financing avenue.

Conventional Loan

Otherwise known as traditional loans, conventional commercial real estate loans are issued by banks or lending institutions. Consequently, conventional commercial real estate loans are not backed by the federal government. Often used to purchase and finance assets like owner-occupied office buildings, retail centers, shopping centers, and industrial warehouses, conventional loans have developed a reputation for some of today’s most widely used commercial real estate loans.

Commercial Bridge Loan

As their names suggest, commercial bridge loans represent a temporary loan option for investors to exercise—one that bridges the gap—until refinancing becomes available to make the switch to a longer-term loan.

Hard Money Loan

A hard money loan is made available to commercial investors by organized semi-institutionalized lenders. More importantly, however, hard money lenders are typically licensed to lend to real estate investors and specialize in short-term high-rate loans with fees that award many investors the chance to buy commercial real estate that they wouldn’t be able to otherwise.

Conduit Loan

Otherwise known as commercial mortgage-backed securities (CMBS), conduit loans are commercial real estate loans secured by a first-position mortgage on a commercial property. Conduit loans are traditionally offered to borrowers through commercial banks; conduit loans offer borrowers a fixed interest rate over 25 — 30 years. However, it is important to note that conduit loans will require a balloon payment at the end of the term.

Insurance Loans

Life insurance providers, or conglomerate companies, offer commercial real estate loans where the borrower’s line of credit is secured with a first lien position on the property. These loans are typically only used by strong borrowers who have an excellent credit history. Further, they are best used on newer properties, or those deemed less risky for the borrower.

Interested in Commercial Investment Properties?

If you are considering investing in commercial properties, it is important to speak with one of our loan specialists to compare the benefits and drawbacks of the many commercial financing options available.