Business Real Estate Loan

Business real estate loans come in different flavors. The loan you want will vary depending on which flavor/type of business real estate you need financed. Here is a quick review of business real estate types.

Owner Occupied Business Real Estate: These are properties in which your business will occupy a minimum of 51% of the rent-able square feet. Conventional and SBA financing are normal sources for these property types.

Multifamily or Apartments: These are buildings with 5 or more residential rental units. These properties are financed by insurance companies, private funds, banks and conduits. Some of these sources will utilize Fannie Mae and HUD programs for financing.

Investor Real Estate: These could be retail space, strip malls, office/warehouse and other types of real estate. In general, if your business doesn’t occupy 51% of the property being financed it will be considered investor property. These loans can be non recourse with the right sources.

Within these business real estate property types there are further distinctions and classifications. Special use properties or single use properties are more difficult to get loans for than multi use property types. It is important to know what you are offering a lender when seeking commercial financing. Rates and terms vary greatly depending on the business property type and classification.

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