Business Real Estate Loans – Which One Best Suits the Needs of Your Business?

1. Business Real Estate Loans – Which One Best Suits the Needs of Your Business? Commercial real estate properties are designed to be used for business purposes. There are a wide variety of business real estate loan options you can take into consideration in the event you decide to purchase commercial real estate to expand and improve your own business. A business that owns the property it operates from is more valuable and this is something to take into consideration especially if you ever decide to sell your business. You will secure a higher offer for your business if you own the property than if you was renting your premises. When it comes to business real estate loans, there isn't one blanket loan that covers all your needs. You will find there are a number of loan solutions, along with varying rates and uses. You will want to pay close attention to the various commercial loan options to identify which one will work best for you in the long run. Long term fixed interest loans are standard commercial real estate loans that are offered by banks and work similar to a home mortgage. The uses are broader and the terms are shorter. Rather than having thirty years to repay the loan, you may only have five to ten years being a commercial property. You will require an excellent credit score of at least seven hundred or more and your business must be operating for at least a year. You also need to have fifty-one percent occupancy on the property before this commercial loan is available to you. The next business real estate loan you may consider is an interest only payment loan, also known as a balloon loan. These loans are designed for businesses that are expecting a large payment in the near future. Rather than paying a monthly repayment at the start, payments are smaller interest only payments with full payment due at the end of the term. This can be anything up to seven years and is considered a short-term loan. This loan is ideal for those who want to construct the building and then refinance once completed to pay the lump sum due. Refinancing loans are very popular in the business industry. This allows business owners to take advantage of lower rates by taking out another loan to repay the original loan. It is important before jumping at a lower interest rate to identify if you will be penalized with any fees and costs for ending your original loan early. This may be minimal compared to the long-term savings you can enjoy. You may often hear the term bridge loans in the commercial real estate industry. These are what are called hard loans and come with a lower interest rate and terms up to three years. The loan can pay out the money needed within forty-five days. You will need a good credit score and must have at least a ten to twenty percent down payment available. These loans are used to pay for construction and renovations. Construction loans are used when you want to cover the costs of building your commercial premises. This can be retail fronts, offices, industrial facilities and more. If you have already purchased the undeveloped land, it can be used as collateral for the construction process, giving you the cash needed to pay for building materials and any labor costs.

2. Do your research, speak to your banker and ensure you choose the right commercial real estate loan based on your particular needs. About Us: CalPrivate Bank, formerly San Diego Private Bank, is a leading private bank serving clients throughout Southern California in the United States. This very well-established bank services high net worth individuals and businesses of all sizes. CalPrivate Bank's focus is to provide a Distinctly Different Banking Experience through unparalleled service and creative funding solutions for individuals and businesses with complex financial needs. They offer a wide array of financial services, including checking, savings, time deposit accounts, treasury management and related tools. To find out more, visit https://calprivate.bank/.