Commercial loans are business-purpose loans used to acquire, develop, or refinance income-generating properties like office buildings, retail centers, warehouses, or multifamily housing.
Eligibility:
Business must have a strong financial profile or cash flow.
Minimum credit score generally 660 or higher.
Down payment typically 20–30% of the loan amount.
Requires a detailed business plan and property income analysis.
Some loans require collateral.
Benefits:
Enables business expansion and property acquisition.
Access to large loan amounts with long repayment terms.
Can be structured for owner-occupied or investment properties.
Helps build business credit and asset portfolio.
Pros:
Flexible loan structures: Term loans, bridge loans, SBA loans, and more.
Supports business growth with capital for property or equipment.
Tax advantages for depreciation and interest deductions.
Equity building in commercial real estate.
Cons:
Stricter qualification requirements than residential loans.
Higher interest rates and fees, especially for startups.
Down payments and collateral can be substantial.
Market-dependent: Success tied to economic and property market conditions.
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