Commercial properties can be an excellent investment. They are generally high-value, and they usually do not depreciate. However, getting funding for these properties can be challenging if you do not have the correct information. There are many different types of loans available, and, depending on your needs and budget, some are better than others. Here’s a look at three loans you can use to finance your commercial real estate purchase.

What Is Commercial Real Estate?

Commercial investments are any office, retail, and industrial spaces that you see daily. Other types of buildings are malls, medical structures, and warehouses. This property type is also called investment or income property.

SBA 7(a) Loan

There are several 7(a) type loans, and they are all a bit different. Deciding which one is best depends on why you need the loan. Some loans are the Standard 7(a) loan, the 7(a) Small Loan, and the SBA Express.

The Standard 7(a) Loan has a maximum loan amount of $5 million and is best for large businesses or purchases. The 7(a) Small Loan is a version of the Standard Loan and has a maximum loan amount of $350,000. It is better for smaller businesses or those with a smaller budget. The SBA Express Loan is awarded within 36 hours and has a maximum loan amount of $350,000. If you need money in a short amount of time, this could be the loan you need.

Conventional Loan

A conventional loan is just how it sounds. It is a traditional loan given out by lenders or banks. It is generally used to purchase retail and office space and is well-known for financing commercial real estate. Be aware that while there is usually no limit, approval for this loan is challenging.

Conduit Loans

If you have a first-position mortgage on a commercial property, you are eligible for a conduit loan. Traditional banks offer this lending type. It has a fixed interest rate for about 25 years and requires a balloon payment at the end of the loan. However, it is flexible and allows more investors the opportunity to qualify for a loan.

Here are three popular loans you can use to purchase commercial real estate. There are many others available. Depending on the size and type of the property, a different loan might be more suitable for you. Investigating which one will best suit your needs and budget will narrow down your choices.