If you own a business and are looking to open a storefront, or simply want to expand your footprint, getting a commercial real estate loan may be your next step. There are several types of loans to choose from, with varying terms and rates, depending on your business needs. Some commercial loans are specific to owner-occupied businesses, while others are designed for commercial real estate investors that lease out commercial space.
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Commercial real estate loans help businesses purchase buildings or other real estate.
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These loans typically come with shorter loan terms and higher interest rates than residential real estate loans.
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Commercial real estate loans can be used for owner-occupied buildings, or for investors to lease out commercial space.
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Expect a longer amortization schedule with commercial real estate loans.
How it Works
Commercial real estate loans are mortgages that are secured by physical property, including office buildings, restaurants, shopping centers or other commercial buildings. They are used to purchase or improve commercial property for the purpose of producing income. This is how they are used:
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Property acquisition. Commercial real estate loans are commonly used to purchase properties such as office buildings, retail spaces, industrial warehouses, hotels, apartment complexes and other income-generating properties.
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Development and construction. Developers and investors often rely on commercial real estate loans to finance the construction or renovation of commercial properties. These loans can cover the costs of land acquisition, construction materials, labor, permits and other expenses associated with the development process.
Expansion or upgrades. Existing businesses may seek commercial real estate loans to expand their operations by acquiring additional space, renovating existing properties or upgrading facilities to accommodate growth.
