Commercial Real Estate Loans: Tips and Pitfalls

Affordable real estate loans are very important for business owners and especially for smaller companies as well as for single entrepreneurs. In this review we will provide more information on how commercial loans work and how these can help your business.

Classic Real Estate Loan

Actually, commercial and private real estate loans have a lot in common. An average real estate loan for business is taken for a longer period from 5 to 30 years – typically people apply for 15-30 years loans.

Interest rate may vary a lot depending on the history of your business. If you run a stable company which pay all debts and loans in time and has some visible progress there are good chances to receive a real estate loan with the interest rate lower than 4%. However, average interest rate for a classic real estate loan is somewhere between 4.5% and 6%.

Instant Real Estate Loan

Instant loans have grown incredibly popular over last 10 years. The reason is obvious – people do not want to waste time and wait for banks to approve loan applications, they want to get money as fast as possible. Instant for instance, a typical Wisconsin Cash Advance has a lot of benefits for both private and business customers.

Speaking from the point of commercial loans we should emphasize that getting an instant loan allows entrepreneurs and companies act fast and be in time. That is why they highly appreciate this opportunity.

An instant loan can be also useful when a company has some urgent costs to be covered – to pay employees, to repair or buy new equipment after sudden breakdown etc. There are really plenty of reasons why business owners consider applying for an instant real estate loan.


Basically there are only two main types of real estate loans on market – classic and instant. Classic loans may be subdivided in several smaller categories depending on different peculiarities, but in general all classic loans have more or less same requirements.

If you are not ready for long waiting and/or have poor credit history instant commercial real estate loans are the only possible solution. Please, don’t be afraid of higher interest rate – if you fulfill the obligations and pay back in time you will notice that actually the amount overpaid is not that high at all.

Before taking an instant cash loan it’s enough to make sure you are dealing with a trustworthy company and that they do not add anything suspicious printed with very small font in the bottom of the loan contract page.

Commercial Mortgage Pitfalls

People who are totally new in short-term loans without credit check should keep in mind that a commercial mortgage is something totally different from residential mortgages. In other words, it is riskier for a lender as there are no loan guarantors. Therefore it is absolutely natural that lenders set higher interest rate and require more information about business, bigger down payment etc.

It is different with instant loans, though. You get money much faster without all that annoying bureaucracy and without proving that your business has good prospects. Of course, such lending is even riskier – you certainly understand that. So here we have the reason why companies providing short term loans have higher interest rate – they risk a lot.

But if you approach that issue wisely you can get the main advantage of an instant short-term loan – you will receive money shortly.

No more balloons

People who are thinking about getting a short-term mortgage loan for some illegal or not so legal purposes are highly recommended to give up. The times when loans were issued to everyone have passed once and forever. No new balloons will appear as market players have got much smarter. There is no sense in hoping for refinancing in case of failure, so the first important tip is to apply for a loan only if you have a clear vision of how it will be used.

Down payment is the key

A solid down payment makes you a trustworthy customer for any institution including those that offer short-term loans. If you are solvent – you get much better offer! That is the rule which works with all kinds of loans.

Actually, there are lenders who allow to borrow up to 90 percent of the property cost. This number can grow even more depending on a particular financial institution, but the best way to get better interest rate is still to provide a solid down payment.

Hidden fees

Finally we need to mention a very important thing which some light-fingered lenders like to use. Please, don’t hurry up to sign anything – you need to thoroughly examine the agreement before! Hidden fees are the greatest headache for a lot of inexperienced (as well as experienced) borrowers who are too happy to get a short-term loan without credit check.

If you are not sure – don’t hesitate to contact a lawyer who can check the contact offered by a financial institution and tell you if it looks transparent and fair. It’s a very important thing to consider, don’t try to save time and money on it.

As you know there are many pitfalls with commercial mortage loans, but even following our simple tips will certainly help you avoid some serious problems.