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5 types of Commercial Real Estate Loan Guide

commercial real estate

​​A commercial Real Estate Loan us used to buy / re-model an owner occupied commercial property. An “owner occupied” commercial property is one where the business occupies at least 51% of the property. This article focuses on financing availability for Owner-occupied commercial loans. These properties can include office, retail, industrial and hospitality properties which together account for 64% of commercial real estate loans. Each of the loans discussed in this article is used for certain types of commercial buildings and they have specific terms and qualifications. Below are 5 types of commercial real estate loans, their uses and requirements. ​ ​ SBA 7(a) Loan This loan is a mortgage backed by the U.S. Small Business Administration (SBA). They are the most common types of SBA loans and assist businesses buy or refinance owner occupied commercial properties to a range up to $ 5,000,000. In the year 2016, 65% of SBA 7(a) loans were obtained by existing businesses and the rest 35% were obtained by new businesses. The bulk of SBA 7(a) loans are used to finance working capital. However, they can be used to purchase new property as well. They have been constructed to help businesses who might be denied by the bank. They are offered to those businesses who fall below a specific revenue threshold and therefore are a tool for stimulating economic growth. ​