If you are looking to start or grow your business, you may be in the market for a commercial mortgage. Whether you have been renting a location for years and made a recent decision to buy a permanent space or whether you are starting a business and want to own your location right from the start Ð even if you want to remodel the space you already own Ð a commercial real estate loan can be just what you need. What you need to decide now is: what type of loan best suits your needs?

• Acquisition and Development:  An acquisition and development loan is best suited to a buyer who is planning to purchase and build upon raw land.  This is the sort of lending you will partake in if you are buying vacant property or “build to suit” property.  The mortgage will give you the money to pay for the land and also begin construction so that your business can have a real home there.
• Adjustable or Fixed Rate Commercial:  Both adjustable rate and fixed rate loans are available for commercial properties.  There are valid reasons for choosing one or the other, and those usually vary depending on your intentions.  If you are planning to move within 5-7 years or refinance at that point, an ARM can save you on interest.  However, if you are planning to stay put and do not want to worry about refinancing when the interest rates go up, you may want to consider a more stable, fixed rate lending situation.   
• Interim:  An interim loan (also known as a bridge) can be used for a short period of time.  Often, these are useful if you are waiting on the sale of one property in order to pay for another, or if you are expecting financial support from other sources once your business is fully operational. 
• Participating:  A participating mortgage on a commercial property is one in which the lender has a vested interest in the property.  Rather than just earning interest on the money, the bank is a partner in the company and will be receiving a portion of the business' profits.  Having this sort of financial backing can be a huge help for start-up corporations. 
• Wraparound:  A wraparound loan is an untraditional lending situation in which the property's original owner agrees to let you move in and use the property, paying out the remainder of his or her mortgage at a higher interest rate than the bank has set.  It can be a way to avoid lengthly credit checks and circumvent the process of obtaining a traditional commercial loan, especially useful for new operations with little or no credit history.  However, these are not permitted in all states, and you should be aware that the seller maintains the deed to the land until it has been paid off. 

Starting and growing a business can be difficult, but our commercial property lenders can help you make sense of the real estate aspects of your operation.  Contact us today for a mortgage quote.

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