Whether you are planning to execute a fix-and-flip deal or need financing for your business needs commercial real estate loans Houston can be the solution to your problem. But to make the most out of such financing options you need to know how to begin, whether the loans can help you to invest in properties of your choice or if these are for non-profit sectors. Before that, it is necessary to know if the business that you are planning to develop falls under commercial real estate investment.The following property investment can be considered under such heads;
- ·
Industrial
Properties
- ·
Nursing
Homes, Sports Facilities, and Hotels
- ·
Apartments
- ·
Restaurant
or Retail Shops
- ·
Office
Properties
- ·
Land
developed for Future Work
The list is exhaustive and all business activities falling
under such categories can be considered as commercial real estate investment.
Different types of CRE Loans
Not all loans taken for commercial investment have the same
nature and requirement. Some of the popular types of CRE loans include –
·
SBA 7(a) Loans
The Small Business Administration provides guarantees for
commercial real estate financing. This means that the borrower will have to
undergo the usual approval process for a commercial loan while the same is
being backed by the SBA for the amount lent by them. While the borrower enjoys
some flexibility in using the loan amount certain criteria needs should be met
to be eligible for such a loan.
·
SBA 504 Loans
This type of loan is generally granted by a certified
development company. A certain part of the loan amount is granted by the
company while a majority of the portion is granted by another financial
institution such as a bank.
·
Bridge
Loans
Similar to hard money loans, bridge loans carry a high-interest
rate and are given for a short term. This loan is provided for sustaining the
cash flow of the business at the time of leasing up, improving, or refinancing
commercial property.
·
Hard
Money Loan
This type of loan is generally applied to bypass the
cumbersome traditional lending route. These are generally granted by private
companies and individuals who do not seek much proof of the financial
background or creditworthiness of the borrower. Instead, the property for which
such a loan is taken can be used for recovering the loan amount in case of
default in repayment.
·
Blanket
Loan
Borrowers looking to invest in multiple properties should
take a blanket loan. This loan type has a single payment, single lender, and a
single set of loan terms for multiple properties. However, since multiple
properties are tied together it can be difficult to sell off any single
property and settle the loan amount proportionately.
Finding the right loan for you
Before you decide to take commercial real
estate loans Houston you must be aware of the different types of commercial loans
available. Besides, you should also be able to understand the different
circumstances under which such loans are suitable. Only then will you be able
to make the most out of such a financing option. A good lender will be able to
assist you in this matter and direct you towards the right path.
