Commercial Land Loans
Commercial land loans are income production property used for business purposes, for example, shopping centers, hotels, etc. The development and construction, acquisition, and financing of these properties are made through commercial land loans.
What are Commercial Land Loans?
Home mortgages, Commercial Real Estate Loan Pros of Gainesville, and banks are involved in making the land loan. Insurance companies, private sectors, and other sources provide funds for commercial land loans. Commercial land loans are usually secured loans, and the collateral is the property being purchased. The large size of most land loans has a greater risk for the lender. Larger down payments are required.
Importance of Commercial Land Loans
This loan is an essential part of the economy because of many reasons. First, commercial land loans are necessary financing for all businesses to operate. Then, the loans are large and provide bulk capital earned for the commercial banks and other lenders.
The property itself secures the loans for the purchase of the property. A commercial land loan covers a broader group of loan types and is provided by different lenders. Different lenders have different loan processes. This loan can be sought for different uses, but the reason is the main business
A company may be seeking to manufacture space, buy a warehouse or an office. Another may be looking for funds to purchase a rental property. A business looks for financing to obtain a rental property. A housing development company may need a commercial land loan to fund a new development project.
Types of Commercial Land Loans
Several specific financing structures may be used in commercial land loan lending. There are five major categories of commercial land loan purchases, and they are as follows.
- Hard Money Loans: Private lending companies or private investors provide hard money commercial land loans. The loans are only guaranteed by the value of the property the money loaned is opposed. Hard money loans are commonly given to companies with less than outstanding credit. This makes it challenging to obtain a loan from a credit union, commercial bank, or other lenders. These lenders may be experiencing financial trouble.
- Bridge Loans: These are short-term commercial land loans. The loan term for a bridge loan is between six months to two years. Bridge loans are commonly used if the buyer expects to sell the property within the time frame of the bridge loan. It can be used if they expect to improve their credit rating during that time frame significantly.
- Seller-Financed Loans: Seller-financed loans are commonly available for the purchase of income-producing properties. An example of a property is a company purchasing a property from an individual rather than another company.
- Ordinary Commercial Land Loans: The financing of this loan closely resembles residential mortgage financing. Commercial land loans are sometimes referred to as permanent loans. The property purchased serves as the loan collateral.
- Small Business Administration Loans (SBA): When the SBA loan guarantees at least a portion of a commercial land loan, the borrower gets a higher interest rate since the lender has much lower risk exposure.
There are so many areas or regions where we offer these services with most of them being cities.
However, if you need any of these services, you need to contact us. The list below comprises the areas where we offer these services.