Florida residents who are interested in starting a business may be concerned about securing an ideal commercial location. Getting financing is an important part of obtaining commercial real estate. Prospective business owners should understand where they should go for commercial real estate loans and what to do to improve their chances of getting approved for one.
Commercial real estate loans are mortgage loans that are used to purchase commercial real estate, or commercial properties that produce business income. The loans can be used to buy retail stores, office locations or a wide range of other buildings and locations.
In addition to the type of property it is used the purchase, commercial real estate loans differ from residential real estate loans in that their loan terms tend to be shorter, running from 5 years to up to 20 years, and the interest rates are usually higher. Commercial loans also require a final balloon payment to pay off the outstanding loan balance at the end of the loan term.
When searching for places to get a commercial loan, entrepreneurs may first want to consider traditional banks. These loans tend to have lower interest rates than loans obtained from other sources, but they can be difficult to qualify for and will require sufficient collateral.
For entrepreneurs who want to build their own commercial space, they may consider using construction loans as a source of financing. These short-term loans are released in increments as the construction of the property progresses.
A real estate attorney may provide legal guidance for entrepreneurs seeking to obtain commercial real estate for their business. The attorney may assist by reviewing purchase agreements or loan contracts. The attorney might also oversee real estate closings and the valuations of potential business sites, such as warehouses and industrial properties.