Finding
the right type of commercial real estate loan to fund your commercial real
estate financing needs can be a daunting task. Financing forms a major part of
commercial real estate investing and small mistakes in this light may lead to
huge financial losses. Therefore, making a well-informed decision is of prime
importance. If you're looking for commercial real estate loans Houston, here
are some options you can explore from:
#1 - Traditional commercial
real estate loans
The
first option that comes to many people's minds when they think of commercial
real estate financing options are traditional Commercial loans. These loans
come from banks and are the least costing option with the privilege of obtaining
best terms. But the downside is that bank loans are hard to get. They are
easily available only to those businesses who have a steady profit flow for at
least a couple of years and are thus not suitable for borrowers who do not have
a great credit score.
#2 - Commercial Bridge
Loans
Bridge
loans are provided both by banks and alternative lenders and are used when
investors want to quickly buy a property of capitalise on an opportunity
without having to wait for a long time. These loans are paid off after the
completion of their short term period, either in full or by being converted
into a refinanced loan, with a longer-term. This is go-to if you're in a quick
need of finance.
#3 - Hard money loans
Hard
money loans are easy to procure and are a boon to investors who do not flaunt a
great credit score. They are provided by private money lenders or investors and
are generally short-term coupled with high rates of interest. They are the last
resort for people with average to poor credit scores and a boon to
self-employed people who do not have steady cashflows.
#4 - SBA Commercial Real
Estate Loans
The
next option to choose from while finding
commercial real estate loans Houston is the SBA loan programs which comes
in 2 broad variants - (A) SBA 7(a) Loan Program and (B) SBA 504 Loan Program.
SBA 7(a) Loan Program is the best go-to if you're looking to buy or repair your
commercial real estate property. And, the SBA 504 Loan Program is best suited
for people who want to upgrade or purchase capital heavy assets as it offers
highest savings in the long run. So, depending on the purpose and application
of your loan, you should make a pick between the two options.
