The term "commercial loan" is rather vague. Though often associated with a large commercial purchase, such as an office building, it could also mean a land purchase or even equipment financing. Let's take a closer look at the types of commercial real estate loans as well as types of properties.
Simply put, a commercial real estate loan is a transaction between a lender and a company. These loans come in many shapes and sizes including:
A bridge loan is a short-term loan that can be used as a "bridge" until an investor secures permanent financing or is able to pay off the loan in full.
Hard money loans are short-term loans usually originated by private companies. These loans have higher interest rates than traditional loans, yet a simpler application process.
SBA loans are government-backed loans used to support small business entities. They offer low interest rates and long terms, yet they have stringent requirements.
A non-QM mortgage is a mortgage that fits outside the rules of a qualifying mortgage. This covers many buckets, but in this case we are referring to an investor loan such as Visio’s Rental360 Loan Program. Essentially, these loans are commercial loans for residential properties.
The commercial property examples outlined below would be financed by an SBC Loan.