Traditional commercial real estate loans are designed to help businesses or investors finance the purchase or refinance of commercial properties such as office buildings, retail spaces, or warehouses. These loans typically offer longer terms, ranging from 5 to 20 years, and require a down payment of 20% to 30%. Borrowers qualify based on the property’s income potential and their creditworthiness, making this loan type ideal for those looking to invest in or expand their commercial property portfolio with stable, long-term financing.

DSCR (Debt Service Coverage Ratio) real estate loans are a financing option for income-generating properties, where the loan qualification is based on the property’s ability to generate enough income to cover its debt payments. Instead of focusing on the borrower’s personal income, lenders assess the property’s DSCR, which is calculated by dividing the net operating income by the total debt service. This makes DSCR loans ideal for real estate investors, especially those with rental properties, as it simplifies the qualification process and offers flexibility in portfolio expansion.

The SBA 7(a) Loan is a versatile financing option backed by the U.S. Small Business Administration, designed to help small businesses with various needs, such as purchasing real estate, funding working capital, or acquiring equipment. With loan amounts up to $5 million, it offers competitive interest rates and flexible repayment terms, making it a popular choice for business owners looking to expand or strengthen their operations. The SBA 7(a) Loan also offers lower down payments and longer repayment periods compared to traditional financing options, providing more accessible funding for small businesses.

The SBA 504 Loan is designed to help small businesses finance the purchase of fixed assets, such as real estate or large equipment, with long-term, fixed-rate financing. This loan offers up to $5.5 million in funding with low down payments, typically around 10%, making it ideal for businesses looking to expand. It combines funding from a Certified Development Company (CDC) and a traditional lender, providing competitive rates and repayment terms of 10 to 25 years. The SBA 504 Loan is a great option for businesses seeking to grow through major investments in property or equipment.

A Commercial Construction Loan is a short-term financing solution designed to cover the costs of building or renovating commercial properties. These loans provide funds for a wide range of construction projects, including office buildings, retail centers, and industrial spaces. Unlike traditional real estate loans, commercial construction loans are typically disbursed in stages, known as “draws,” as the project progresses. This ensures that funds are released as needed to cover construction milestones. Borrowers typically repay the loan once the project is complete, either by refinancing into a long-term mortgage or selling the property. These loans are essential for developers and businesses looking to grow or enhance their commercial real estate portfolio.

A Bridge Loan is a short-term financing option used to bridge the gap between the purchase of a new property and securing long-term financing or selling an existing property. It provides immediate access to funds, allowing investors or businesses to quickly act on real estate opportunities or cover urgent financial needs during transitions. Typically, bridge loans have higher interest rates and shorter repayment periods, usually between 6 months to 3 years. These loans are ideal for those needing quick capital to secure a property while waiting for permanent financing or the sale of another asset.

A Commercial Mortgage-Backed Securities (CMBS) Loan is a type of commercial real estate loan that is pooled with other loans and sold to investors as securities. These loans are typically used for income-generating properties like office buildings, shopping centers, and hotels. CMBS loans are attractive to borrowers because they often have lower interest rates and more flexible terms. However, they also come with strict rules and penalties for prepayment. For investors, CMBS loans offer a steady income stream backed by the underlying real estate, making them a popular option in the commercial lending market.

A Hard Money Loan is a short-term, asset-based financing option primarily used by real estate investors to purchase or renovate properties. Unlike traditional loans, hard money loans are secured by the value of the property itself rather than the borrower’s creditworthiness. These loans typically come with higher interest rates and shorter repayment periods, making them ideal for projects that require quick funding, such as property flips or developments. While more expensive, hard money loans offer faster approval and funding, making them a popular choice for investors who need capital quickly for high-potential real estate deals.

A Real Estate Investment Loan (REIL) is a financing option specifically designed for investors looking to purchase, renovate, or refinance income-generating properties, such as rental units, multi-family buildings, or commercial spaces. These loans focus on the property’s potential to generate revenue, making them ideal for real estate investors who aim to build or expand their portfolios. REILs typically offer flexible terms and competitive interest rates, allowing investors to leverage their capital and maximize returns. They are a key tool for both new and experienced real estate investors seeking long-term growth through property investment.

A Development Loan is a type of financing used to fund the construction or redevelopment of real estate projects, such as residential subdivisions, commercial complexes, or industrial parks. These loans provide the capital necessary to cover costs like land acquisition, infrastructure development, and building construction. Development loans are typically short-term and disbursed in phases as the project progresses. Once construction is complete, borrowers often refinance into long-term financing. This type of loan is essential for developers looking to bring new real estate projects to life, offering the flexibility to manage large-scale developments.

A Mezzanine Loan is a hybrid form of financing that combines elements of debt and equity, typically used in commercial real estate or business acquisitions. It sits between senior debt and equity in the capital structure, offering lenders the right to convert the loan into an equity stake if the borrower defaults. Mezzanine loans are often used by companies or developers to bridge funding gaps for large projects or expansions. While they come with higher interest rates due to the increased risk, they offer flexible repayment terms and are a popular choice for businesses or investors looking to secure additional capital without giving up significant ownership or control.

A Non-Recourse Loan is a type of financing where the lender’s ability to recover the loan is limited to the collateral securing the loan, usually the property itself. In the event of default, the lender can seize the collateral but cannot pursue the borrower’s other assets or personal finances. Non-recourse loans are commonly used in commercial real estate investments, offering borrowers protection from personal liability while giving lenders security through the value of the property. This type of loan is attractive to investors looking to limit their risk, though it often comes with stricter qualification criteria and higher interest rates.