Property investments can be tricky when you’re first starting out. With commercial properties, matters can become even more complicated. There are many options available to you when it comes to selecting the right type of commercial property for your purposes, and this is only the beginning. You also need to consider commercial real estate financing. Obtaining funds to fuel your investment takes time, patience, and a lot of research. Get prepared for what’s ahead by looking over some of this basic information surrounding real estate financing solutions.
If you already own residential real estate, then you might assume your best bet is to obtain a loan through a financial institution like a bank or credit union. While not a bad idea, there are several drawbacks to this path. The bank approval process can usually take a considerable amount of time. What’s more, the nature and purpose of the property you are investing in can negatively impact the rates and terms offered to you on a loan. Banks like low-risk endeavors and a lot of commercial investments can be perceived as risky.
While similar to traditional financing obtained through a bank, SBA loans offer a few key differences that can be advantageous to commercial investors. Released through the Small Business Association, this financing solution provides the opportunity for small business owners to get the funds needed to make big changes with their establishments. These loans usually come with appealing rates and terms, but the approval process can be rigorous. In order to see whether or not you are eligible, reach out to a local lender that offers SBA loans and learn what it takes to begin your application.
When it comes to commercial real estate financing, there are two distinct categories to think about. Long-term financing covers the entire period of investing and rehabilitation. Short-term financing like bridge loans, however, are meant to provide an initial investment on time-sensitive opportunities. If you want to capitalize upon a great piece of property and do not have the time to wait for approval on a loan from a bank, then this is a great way for you to nab the real estate you desire.
There are a number of different options available to you when it comes to investing in commercial properties. Whether you opt for a traditional mortgage or something short-term like a bridge loan, you need to know what’s out there. Read up on the various commercial real estate solutions and what advantages each offers to get a better idea of what path to take.