Financing Commercial Real Estate

Financing sources for commercial real estate include mortgage banking firms, savings and loan institutions, regional banks, insurance companies, and private investors. Commercial real estate financing

• Anticipated use of the property;
• Anticipated returns from the property;
• Geography;
• Type of real estate;
• Size of real estate;
• Perceived risk to lender;
• Market conditions.

Each of these areas must be examined by the business owner prior to seeking commercial real estate financing. Business owners then need to examine the type of loans offered by lenders in accordance with their needs and anticipated growth. Unlike obtaining financing for residential real estate, where the transaction is based on the value of the home at the time of the sale, commercial real estate financing will be based — in part — on the value of the business in the future.