Commercial Loans: Commercial Real Estate Loans, Hard Money Loans & Bridge Loans

Commercial loans are financial products that provide funding for medium size and large business endeavors. Multi-million dollar transactions are the norm in commercial lending. Typical uses of funds are for capital-intensive business projects and large real estate developments.

These loans require a fully completed detailed loan application package that will give the lenders a full understanding of the financial standing of the applicants. You and all other principals may be required to give a personal guarantee, even if your business is a corporation, for the loan. This may expose your personal assets in the event of a default on the loan. Click here for a Loan Application

The terms for this kind of business loan are usually 2,3,4,5,6, 7, and 8 years. In some cases these loans may be amortized on a 20, 25 or 30-year schedule. The longer payment term schedule results in a much lower monthly payment for the loan. The downside is that at the end of the term, the unpaid balance is due in the form of a balloon payment. If you decide to accept a loan with a balloon payment at the end of the term, you must be sure that you have a workable plan to payoff the loan at the due date. The recent financial climate, with rapid changes and uncertainty of the future, will probably make it difficult to obtain a loan with a balloon payment attached.

Typical Interest Rate

The interest rate is typically expressed as the prime rate plus a percentage. For example: "prime + 1" means the current prime interest rate plus an additional one percent. It the prime rate is 4.25% then your loan will have an interest rate of 5.25%. The prime rate is the interest charged by the largest banks to their best largest customers.