4 Popular Types of Commercial Real Estate Loans in 2022

What is the definition of a commercial real estate loan? A commercial real estate loan is a sort of mortgage used by corporations and individuals to fund commercial properties such as offices, warehouses, and even income-producing properties.

Here is the list of 4 Popular Types of Commercial Real Estate Loans in 2022

1. Short-Term Loans Term loans are the first and most common type of commercial real estate loan.

When most people think of a business loan, or any loan for that matter, they think of term loans.

They give you a lump sum of money that you'll pay back in monthly installments.

2. Small Business Administration (SBA) Loans Small Business Administration (SBA) loans are government-backed. In other words, the government agrees to cover a portion of your outstanding balance in case you default.

This gives lenders an extra layer of security – which translates to lower interest rates on your end.

3. Business Line of Credit One of the most common types of commercial real estate loans are business lines of credit. They are oftentimes compared to credit cards.

They work similarly, however,  lines of credit feature higher funding amounts and lower interest rates. Plus, this funding type is very flexible.

4. Bridge Loans Bridge loans are a kind of short-term financing solution that provides an influx of cash until borrowers secure a more permanent type of financing.

 They’re frequently used by businesses and homeowners that need funds to purchase a property but are also waiting on another property to sell.