Real Estate Loans

Thinking about acquiring land or renovating a property for your business, but have concerns over the upfront cost?  Consider utilizing a real estate loan. Our network of trusted lenders can help you safely navigate the process and manage payments in an affordable way.

What is Real Estate Loan?

Real estate loans are loans specifically designed to help businesses acquire or renovate a property that they plan to occupy.  Even when a business has the liquidity to purchase a building outright, it often makes sense to finance instead, as companies that leverage real estate loans often receive tax advantages.

The application process, designed to compensate for higher risks, may seem daunting.  Banks and lenders will usually want to review a thorough business plan and understand your ability to repay.  Our team can help you manage the process and answer any questions you may have along the way.

Conventional Commercial Mortgage Loans
Like a home mortgage, conventional real estate loans are distributed in a lump sum and require monthly payments. For businesses, loans usually have shorter terms (5-10 years instead of 30 years) and slightly higher interest rates. Additionally, conventional real estate loans can take between 30 and 60 days to approve.
SBA 7(a) and SBA 504
The Small Business Administration provides excellent options for your growing company, allowing you to take advantage of SBA-regulated interest rates and up to $5M in financing. The SBA further incentivizes lenders by acting as a co-signer on real estate loans, meaning your small business can qualify when other lenders have declined.
Hard Money and Bridge Loans
Sometimes, however, your business needs money quickly. Perhaps you need to make a balloon payment or secure a hot property in a few days. A bridge loan or a hard money loan, despite higher interest rates, can provide a rapid solution.

Advantages of Real Estate Loans

  • Make major purchases financially manageable.
  • Obtain flexible repayment terms and competitive rates.
  • Secure a loan by leveraging your target property.
  • Take advantage of loans designed for small businesses.

Frequently Asked Questions

01

When is a Real Estate Loan not a good fit?

If you intend to sell the building or occupy less than 51% of the building’s usable space, you may want to consider a different financing option. You’ll also need to submit several years of tax returns with your application. If you’re new to your business, we can discuss a more suitable loan.

02

Is a down payment required?

An SBA 504 loan requires a 10% down payment, other lenders may require a 20% or 25% down payment. The more money you’re able to provide, the lower your interest rate on a loan is likely to be.

03

What is an owner-operated property?

Business owners who purchase real estate for their own operations are considered owner-operators. Warehouses, manufacturing facilities, and office spaces are a few examples of owner-operated properties. Additionally, the SBA allows owner-operators to rent out up to 49% of their building and retain the benefits of an owner-operator loan.

04

What are investment properties?

In contrast, investment properties are viewed as assets that generate income for business owners, even though they are not physically present. Examples include hotels, apartments, office buildings, and retail centers, which provide income from tenants. Such buildings are not usually eligible for conventional real estate loans or require other types of financing.