Commercial real estate financing is the engine that drives investment opportunities for people interested in acquiring commercial properties. Banks and specialty lending companies are engaged in making these loans. Investment banking companies are also finding this business to be lucrative. Individual investors who have formed an investment company are also a source for commercial real estate financing.
The commercial real estate is used to secure a commercial mortgage. The borrowers are customarily a group of individuals that may have formed a partnership, or some other form of a legally recognized business entity.
A non-recourse commercial mortgage means that should the investors default in payment of the mortgage the creditor can only seize the collateral that was provided to secure the mortgage. A non-recourse mortgage does not provide for a further claim against the borrowers. Mortgages that have been structured for sale as bonds will allow the lender to take the property immediately even if bankruptcy proceedings are under way.
Commercial real estate loans are very similar to commercial mortgages. They differ in that the commercial loans offer more flexibility about the use and the terms. This depends on the lender and the borrower’s relationship with the lender if a bank is the lender. Many banks make commercial real estate loans, so it would be important to have a relationship with the bank.
A bridge loan is a convenient means of covering the period of time before an existing property can close and the new property purchase must be finalized. These loans are more costly, but they serve a valuable purpose in closing a deal that has long term potential.
A10 Capital is known for full service lending that includes all aspects of the loan business. This includes underwriting, origination, closing and servicing.
Investors are finding that there are good sources of financing if they find a viable investment. Of course, the stronger the balance sheet of the investment group, the more likely they are to find the best terms.