Commercial Loans, or Commercial Real Estate Loans, are specific types of business loans used for business real estate financing needs.
There are a variety of types of commercial loans, each with unique uses (and we’ll talk about the specifics more in a minute).
Commercial loans can refer to commercial mortgages, commercial bridge loans, SBA loans, and more.
While loan sizes and interest rates vary from lender to lender and loan to loan, commercial loans often come in large amounts with low rates.
That makes them ideal for large, expensive real estate purchases.
Commercial Loans, or Commercial Real Estate Loans, are specific types of business loans used for business real estate financing needs. There are a variety of types of commercial loans, each with unique uses (and we’ll talk about the specifics more in a minute). Commercial loans can refer to commercial mortgages, commercial bridge loans, SBA loans, and more. While loan sizes and interest rates vary from lender to lender and loan to loan, commercial loans often come in large amounts with low rates. That makes them ideal for large, expensive real estate purchases.
As we said, commercial loans are used for business real estate transactions. That might cover more than you think, though.
For example, one of the more common uses of commercial loans is buying buildings. But there are lots of things that fall under that umbrella:
Plus, you can use these types of loans to buy undeveloped or partially developed land to build any of the above.
You can even use some commercial loans for renovating or flipping existing buildings.
Put simply, commercial loans have a lot of uses.
Applying for a commercial loan is a lot like applying for any other business loan.
Each lender will have its own loan eligibility requirements. But generally, to prove your creditworthiness and qualify for a commercial loan, you’ll need a good credit score, plenty of annual revenue, and a business that’s been around for at least a couple of years.
As part of their underwriting process, lenders will want to look at all sorts of financial documents and details about your business, like these:
Business debt service coverage ratio
But it’s not just you that your lender cares about―they consider the property too.
Therefore, expect your lender to ask for things like appraisals and inspections before agreeing to give you money.
.webp)
