How to Use an SBA Loan for Commercial Real Estate
Making the right investment in real estate can be a great move for your future. Of course, you need to take time to think about what type of property will yield you the biggest return. For many investors, commercial real estate is the way to go. Commercial properties can be used in an array of ways, giving you the ability to maximize your investment. Before you can take advantage of what this decision can bring, you need to think about your financing options. While there are several routes to consider, an SBA loan could be the right fit.
Understanding the Details
Released by the Small Business Administration, these loans are specifically structured for the needs of small business owners. The funds can be used in a variety of ways to help you improve the way your establishment operates. This includes investments in real estate or any properties related to the way you conduct business. In order to qualify for this option, you first need to make sure you have a decent credit score. This is a competitive form of financing and lenders only accept applications from those who meet strict standards.
Benefits
There are a number of benefits that come along with using an SBA loan to finance your commercial real estate investment. For one, you can expect manageable interest rates on this financing option. In most cases, the interest rate will be fixed and the associated costs with closing the loan will still keep all of your payments simple. You will also not be required to make a large down payment when first taking out the loan. You can always put down more if you wish, as putting more forth upfront helps make a more manageable repayment plan.
Fair Terms
This financing option can also be appealing for commercial real estate investments because they are long-term loans. Most people take out these loans for periods ranging from 10 to 20 years. While you may not need this much time, having a large window to pay back the funds is very helpful when you’re working on an involved project related to commercial properties. The longer you have to pay back the loan, the smaller your regular payments become.
When it comes to investing in your future, commercial real estate can offer a number of exciting benefits. Before you can take advantage of this option, it can be a good idea to consider how you plan on financing the project. Explore what an SBA loan can do for you and get started right away.
