Real Estate Loans

One of the best ways to secure new property is with a commercial real estate loan. These loans can be either term or permanent, depending on the nature of the business. Even if the company qualifies for both options, one may be better depending on the circumstances.

The primary difference between a term and a permanent loan is the length of the repayment schedule. While most commercial term loans can be up to 10 years, permanent loans can be extended for up to 30.

Overall, the advantage of extending a term loan is that each monthly payment is lower, which can be less of a burden on the business. Interest rates can also go down. To qualify for a permanent loan, the company needs an excellent credit score.

Typically, most real estate loans require a down payment of up to 30 percent. The loan doesn’t necessarily have to be used to purchase new property. Instead, the funds can go toward refinancing an existing mortgage or improving a building.

Loan Highlights

• Term loans must be repaid between five and ten years from the borrowing date.
• Applicants usually have to pay up to 30 percent of the loan upfront.
• Permanent loans can be extended 25 or 30 years.
• Interest rates can be fixed or variable.
• Up to 80 percent LTV both for term and permanent financing.
• Most commercial real estate loans run from $100,000 to $5 million.
• To qualify, a business has to have excellent credit and financial stability.