Top 10 commercial loan types

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Here are the top 10 types of commercial loans used for various business and real estate financing needs:

1. Commercial Real Estate Loans

• Used to purchase, refinance, or renovate commercial properties (e.g., office buildings, retail centers, warehouses).

• Includes permanent financing, bridge loans, and CMBS loans.

2. SBA 7(a) Loans

• Government-backed loans for small businesses.

• Can be used for real estate, working capital, equipment, or business acquisition.

3. SBA 504 Loans

• Ideal for purchasing real estate or large equipment.

• 50% financed by a private lender, 40% by a Certified Development Company (CDC), and 10% by the borrower.

4. Bridge Loans

• Short-term financing used to "bridge" gaps before securing long-term funding.

• Often used for commercial property purchases or renovations.

5. Construction Loans

• Used to fund new commercial developments or major renovations.

• Typically interest-only during construction, then converts to permanent financing.

6. Hard Money Loans

• Asset-based loans, typically funded by private lenders.

• Higher interest rates but quick approval, used for fix-and-flip or distressed property deals.

7. Mezzanine Financing

• A hybrid loan combining debt and equity.

• Used for large acquisitions or real estate projects requiring high leverage.

8. Equipment Financing

• Loans specifically for purchasing business equipment (e.g., machinery, trucks, medical devices).

• Equipment often serves as collateral.

9. Business Line of Credit

• Revolving credit line businesses can draw from as needed.

• Useful for working capital, payroll, or short-term expenses.

10. Accounts Receivable (Invoice) Financing

• Businesses borrow against unpaid invoices to improve cash flow.

• Common in industries with long payment cycles (e.g., manufacturing, staffing, logistics).