What Kinds Of Real Estate Financing Is Available To You
As your business grows and you need more staff to accommodate your customers, you will have to find space for them to work in. While looking at commercial real estate can be an exciting prospect, paying for your new location can be a challenge. Here are a few types of financing that you can consider as you plan your move.
Getting Financing From the Small Business Administration
The Small Business Administration, or SBA, has a wide variety of loan options for business owners who need funding. A few of these loans are specific for the purchase of a new building or the construction of one. There are others that have a cap of five million dollars and can be used for any expense that your company has, including commercial real estate. If you consider this option, be aware that the process takes several weeks to complete. They will want to know what your credit rating is and they will want detailed copies of your finances. Take your time to prepare this paperwork before you submit it. The representative will come back to you for more information if something is missing and this will hold up your application from being completed.
Getting a Loan From Your Bank
Another option available to you to purchase new property for your company is to talk directly to the bank that you currently do business with. Set up an appointment with a loan officer to discuss what type of financing they can give to you based on your credit and the financial paperwork that you have provided to them. After evaluating what you have submitted, they can let you know how they can help you purchase your new commercial real estate. You will be required to make monthly payments on time to the institution that you work with over the period of several years until it is paid in full.
Loans That Are Issued For Commercial Property
There are financing options that you can apply for that are meant strictly to purchase or remodel your commercial real estate. A balloon payment loan has smaller payments and a shorter payback period. However, when the loan expires, you will be required to satisfy the last large amount of financing that still remains. An interest reset loan has a larger amount that is due each month and the term is longer. The interest rate for this type one is low for a few months but then adjusts itself to compare with the market at the time.