There are many different types of commercial properties and there are many different types of commercial loans available for them. Here are some of the various kinds and what they are used for.
First, there is Acquisition Loans. The purpose of this loan is to acquire property.
Next, there are Acquisition & Development Loans, which are used to acquire property, as well as develop it. Voucher control is typically configured to disperse loan proceeds with interest only paid on funds distributed. The loan to value ratio is decided by the estimated improved value.
Moving on, there are Asset Based Loans. An Asset Based Loan is used for any purpose and collateral is put up for security.
Fourth, there is a type of loan called a bridge loan. The bridge kind of loan is used for a brief period of time until permanent financing is set into place. Bridge loans are a good temporary fix to an acquisition or business adventure, because they allow a borrower to act fast. These types of loans can be used for buy outs, foreclosures, and construction purposes.
Continuing on, there are also different kinds of Construction Loans. Construction loans are used to construct buildings or make improvements of property, with the land improvements and other tangible assets used as collateral. Construction owners reserve accounts are kept to be able to disburse money as the progress of the construction goes on, with as much as the entire cost of the projects and construction available, which is dependent on the value.
Sixth, there are consolidations of debt loans. These loans can offer lower monthly payments by consolidating the debts into one loan and making one payment. When the average interest rate is too much, it is possible to get a debt consolidation loan at a low interest rate. Even without a fluctuation in interest rates, a simple single monthly payment may be worthwhile to lower payments.
Next, there is Development Loans, which are self explanatory. They are taken out for the purpose of developing or improving the actual property.
Next, there is the Construction Improvement and Rehab Loan. A construction improvement and rehab loan is a loan that is used to buy an existing property, specifically with the purpose of repairing deficiencies and remodeling.
Finally, there are Refinancing and SBA Loans. Refinancing is used to pay off any old debt from the money of a new loan that uses the same collateral. Usually, the borrower can choose to refinance when interest rates are lower or terms of the new loan are better than the original.
The purpose of SBA’s Loan Program, is to assist small businesses in getting the credit that they need to get started. However, applicants must first meet SBA’s definition of small business.
So what commercial properties use these various loans? Quite a large variety. Some examples of commercial properties are apartments, shopping centers, malls, office buildings, warehouses, car dealerships, day cares, golf courses, convenient stores, facilities, theatres, health care facilities, motels, raw land, casinos, churches, gas stations, medical buildings, subdivisions, and more.
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