Give Us a Call 24/7 to Speak to a Loan Specialist: (866) 526-0238
Give Us a Call 24/7 to Speak to a Loan Specialist: (866) 526-0238

Commercial Property Loans

The commercial real estate market continued strong growth again in 2015, with many metrics having reached highs not seen in decades. In the third quarter of 2015 there was a net increase of 155,000 commercial office-jobs in the United States — the largest quarterly gain office-using jobs in 15 years. Also in the third quarter of 2015, total U.S. industrial acquisition volume was nearly $13 billion, which happens to be the 5th largest volume amount in a single quarter in two decades. 

These indicators are in-line with what economists are seeing with the surge in commercial real estate prices, as the value of commercial real estate transactions in the United states increased by 36% from a year earlier.

What is a Commercial Property Loan?

Commercial property is land or buildings owned by a business that are used for business purposes and to generate a profit. Types of commercial property include commercial land, office buildings, industrial real estate, retail storefronts and hotels and motels. 

Commercial property loans are used to purchase business real estate, refinance commercial real estate mortgages, cash-out equity in a piece of commercial property, or used to get capital by placing a new mortgage on company-owned real estate.

Reasons for Getting a Property Loan?

  • Take advantage of historically low-interest rates
  • Lock-in a fixed rate interest rate
  • Extend the term of an existing commercial mortgage
  • Avoid a commercial mortage balloon payments
  • Purchase commercial property
  • Cash-out equity in a business property
  • Build-out a commercial property

Documents Needed For a Property Loan?

  • Business tax returns
  • Income statements
  • Balance sheets
  • Appraisal
  • AR/AP aging schedules
  • Schedule of business liabilities (existing business debt)
  • Executive overview

Business Property Loans Through a Traditional Bank

Whether you’re looking to purchase a piece of commercial real estate, refinance your company’s property, or build-out and do renovations to an existing business property, a bank term loan or business line of credit are usually the most sought after choices for commercial property loans. 

Why? Because bank property loans offer the best rates and terms of all commercial lenders. With rates starting in the 4-6% range, and with terms ranging from 5-10 years, a bank financing facility used to purchase or refinance commercial property allows company’s the best way to service the debt in an affordable fashion.

But there is a catch: banks offer the best rates and terms because they only fund the most creditworthy of businesses. Because of their strict credit and cash-flow requirements, only about 20% of bank loans are approved. So a strong personal and business credit are required, along with strong business cash-flow that will show the banks you have the ability to service the new debt. 

  • Bank commercial property loan rates: 4-6%
  • Bank commercial property loan terms: 5-10 years

SBA Property Loans

SBA loans allow small businesses looking to purchase and/or refinance commercial property through a preferred-SBA lender, that they may not have been able to secure through a traditional bank loan.

The SBA doesn’t actually loan money to businesses, but instead agrees to take a large percentage of the lenders’ losses should the small because default on their loan. In theory, by guaranteeing a large portion of the loan, the SBA hopes to get lenders to approve funding for small businesses that wouldn’t necessarily be able to secure traditional bank financing without that SBA-enhancement.

The SBA’s two main loan programs for financing business property are the SBA 7(a) program, and the SBA 504 programs.  

  • SBA property loan rates: 4-7%
  • SBA property loan terms: up to 25 years

Alternative Business Property Loans

For company’s looking for a commercial property loan that doesn’t qualify for traditional bank-rate or SBA financing, there are plenty of alternative mortgage options. 

Alternative lenders are able to offer specialized commercial real estate financing by using the property as collateral to provide term loans and lines of credit in both a 1st, 2nd and even third lien position.

But while these loans are easier to secure than traditional bank financing for commercial real estate, they do have higher rates and shorter terms than you’d usually see from more traditional financing vehicles.

  • Alternative property loan rates: 6-15%
  • Alternative property loan terms: 1-10 years

Who We Are

GUD Capital is a nationally recognized leader in the financing industry for providing the best business lending solutions available to small and mid-sized businesses. We leverage our network of 4,000 competing commercial lenders to provide your business the largest selection of commercial financing options.

Get Started

Recent Posts

Purchase of Future Receivables: Selling Future Bank and Merchant Receivables
June 26, 2017
101 Business Loan Tips: Advice For Small Businesses Seeking Loans
June 22, 2017
Types of Commercial Real Estate Loans & Mortgages
June 21, 2017
Merchant Cash Advance Without a Confession of Judgment: Cash Advances with No COJ
June 19, 2017
Two Merchant Cash Advances Stacked? Reasons Business Resort to Stacking Cash Advances
June 15, 2017
Alternatives to Merchant Cash Advances: Non-MCA Funding Options
June 13, 2017
Long-Term Working Capital: Loans & Financing For Long-Term Growth
June 12, 2017
Oregon Business Loans: Financing Options For Oregon Companies
June 10, 2017
How to Use Business Real Estate to Get Working Capital
June 9, 2017
Refinance a Commercial Mortgage: Commercial Real Estate Loan Refinancing
June 8, 2017
Colorado Business Loans: Lending For Colorado Small Businesses
June 7, 2017
Virginia Business Loans: Financing For Virginia Companies
June 4, 2017
Subprime Business Loans: Funding For Companies With Subprime Credit
June 1, 2017
Illinois Business Loans – Financing For Illinois Small Businesses
May 31, 2017
Instant Business Loans: How To Get An Instant Approval For Business Funding
May 26, 2017
Indiana Business Loans: Financing For Hoosier State Small Businesses
May 23, 2017
Business Loans With No Credit Check: Funding Without Running Credit
May 15, 2017
Fast Small Business Funding Options When You Have Bad Credit
May 13, 2017
Merchant Funding: Options for Merchants & Shopkeepers to Fund Their Small Business
May 11, 2017
Retail Cash Advance: Retail Store & Online Retailer Cash Advances
May 10, 2017
How To Use Future Credit Card Sales to Get a Business Loan?
May 9, 2017
Restaurant Working Capital: Short Term Funding For Restaurants
May 8, 2017
Merchant Cash Advance With Weekly & Monthly Repayment
May 2, 2017
New Jersey Business Loans: Garden State Financing For Businesses
April 30, 2017
MCA Refinance: Merchant & Business Cash Advance Refinancing
April 28, 2017