What a Commercial Real Estate Loan Is
A commercial real estate (CRE) loan helps fund the purchase or refinance of business property—like an office, retail space, warehouse, or mixed-use building. Depending on the deal, programs may be owner-occupied or investment-focused.
Common CRE Loan Types
- Owner-occupied loans (your business uses the property).
- Investment property loans (property income is a key factor).
- SBA 504 (often used for owner-occupied real estate + equipment).
What Lenders Look For
- Down payment and liquidity (cash reserves matter).
- Cash flow and repayment ability (sometimes DSCR-based).
- Property details (type, condition, occupancy, location).
- Borrower strength (credit, business history, experience).
Timeline and Process
CRE loans usually involve appraisal, environmental/inspection steps, underwriting, and documentation. Plan for more time than online short-term funding—CRE is a “measure twice, cut once” process.
Pros and Cons
Pros
- Build equity and stability (owning your location can reduce long-term risk).
- Longer terms compared to many working capital products.
Cons
- More documentation and longer approval timelines.
- Closing costs and third-party reports can add up.
Helpful Next Step
If you’re early in the process, start by tightening financials and understanding funding options like SBA loans and term loans so you can compare pathways.
Note: Educational content only—not financial advice.
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