Starting a business can be both exciting and overwhelming, especially in 2023. Despite the uncertainty in Houston commercial real estate development market, our post, Houston Commercial Construction Outlook for 2023, highlights that the future looks bright for new commercial construction! So, what’s the best way to get started? We encourage you to take it one step at a time. First, you will have to be approved for a commercial real estate development loan. We hope you benefit from our quick and easy breakdown of the different commercial loan types as step one in your business development journey.

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Traditional Bank Loans

Many commercial real estate development loans are provided by banks. Traditional commercial bank loans typically provide you with the ability to construct your dream building or renovate a new one with the lowest rates in the market. While traditional commercial bank loans have low interest rates, they can also have high standards of qualification to receive a loan.

Small Business Administration Loans

Small business administration loans (SBA) make it easy for small business owners to get a commercial real estate loan by setting guidelines and reducing lender risk. These type loans can be used for purchasing new commercial properties, upgrade heavy equipment, or renovate an existing business.

SBA commercial loans are the second most affordable option comparable to traditional bank loans. They often come with continued support as you start your business and lower down payments.

Hard Money Loans

A hard money loan is a short-term loan for commercial real estate developments or investments offered by private money lenders. This type of loan allows the assets being purchased to be recouped by the lender if the borrower defaults. These loans often have lower qualifying standards and shorter processes helping first time borrowers build credibility for future traditional loans. However, if you do construction consulting with us, we will help borrowers try other loan options first due to hard money loans often having higher interest rates.

Short Term Loans

Short term commercial real estate loans are made available through online lenders. The interest rates on these loans are often much higher than traditional loans and can be approved quickly. These loans are perfect for people who need a small amount of money fast to capitalize on an opportunity. While the traditional loan process can take longer than a month, a short term loan can be approved in just a couple days!

Get Started on Houston Commercial Real Estate Development

We hope that this short overview of commercial real estate loans help you get started navigating your commercial real estate development loan options here in Houston. If you are interested in learning more about your options, we offer commercial construction consulting services. Contact us today to set up your consultation.

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