New businesses looking for a long-term option should consider a traditional mortgage. Be advised that you are going to need to have excellent credit, around a score of 700. A traditional mortgage can range anywhere between 15-30 years and come with an interest rate of around 5 percent. This type of commercial real estate loan is ideal for businesses that are still new and have been in business for about one year.
If you are looking for more of a short-term contract, start by l checking out a commercial bridge loan. Again, you are going to need an excellent credit score of around 700, but sometimes credit scores as low as 650 will get approved. These loans are typically very short-term, starting anywhere from around 6 months to 36 months long. The interest rate will range between 6.5 percent to a higher 9 percent. One benefit of this short-term loan is it helps borrowers compete with buyers that use all cash.
A SBA 7(a) loan is the most common of all Texas Commercial Real Estate Loans. In fact, around 65 percent of loans in recent years have been this type. If you happen to be an established business, this is most likely the right loan for you. These loans can be offered in very high amounts and can range in length from 10-25 years. A good credit score is needed, around a score of 680. The interest rates are pretty decent and can range between 5 percent to 8.75 percent.
A commercial hard money loan is also another great option if you are looking for short-term financing. Businesses looking for financing to help with renovations can take advantage of this loan, which happens to be very similar to a commercial bridge loan. Credit scores as low as 600 have a chance of getting approved, but be aware of the high interest rates, ranging between 8 percent to 13 percent. Companies that have been in business for just a few years can really aid from a commercial hard money loan.
Another ideal loan for established businesses is the CDC/SBA 504 loan. This is actually considered 2 loans and happens to be less common. Just like with most loans, good credit is needed, with a score of at least 680 usually being accepted. But this commercial real estate loan is a little different because there is actually no maximum limit. The length of the loan is usually around 20 years and comes with a shockingly low interest rate, under 5 percent and can be as even low as 3.5 percent.
Level 4 Funding LLC Private Hard Money Lender
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis@level4funding.com NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave |Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real est
ate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.