Understanding Commercial Real Estate Loans: Bridge Loans, Permanent Loans, and More.

Commercial Real Estate Loans: A Complete Guide for Borrowers

Whether you're acquiring an office building, refinancing a multifamily property, or developing a new retail center, commercial real estate (CRE) loans are essential tools for success. At Commercial Partners of Texas (Amerimort.com), we help investors and business owners secure the right financing options for their specific project. This article breaks down the most common types of commercial real estate loans, including bridge loans, permanent financing, SBA loans, and more.

What Is a Commercial Real Estate Loan?

A commercial real estate loan is a type of financing used to purchase, develop, or refinance income-producing properties such as office buildings, warehouses, retail centers, multifamily apartments, hotels, and industrial properties.

Unlike residential loans, CRE financing is typically based on the income potential of the property, the strength of the borrower, and the project’s viability.

1. Bridge Loans: Short-Term Financing for Transitional Projects

Bridge loans are short-term loans (typically 6–36 months) used by real estate investors and developers to "bridge the gap" between immediate financing needs and long-term solutions. These loans are ideal for:

• Acquiring properties quickly (e.g., foreclosure, auction)

• Renovating or repositioning properties before permanent financing

• Buying time during lease-up or stabilization

  
  

Benefits:

• Fast closings

• Flexible underwriting

• Interest-only payments

• Asset-focused (less reliant on credit scores)

Best For: Investors flipping or stabilizing properties, time-sensitive purchases, and value-add CRE projects.

2. Permanent Loans: Long-Term Commercial Financing

After a property is stabilized and income-producing, a permanent loan replaces short-term financing (like a bridge loan). These loans typically have terms of 5 to 30 years, depending on the lender.

Sources:

• Banks and credit unions

• Life insurance companies

• CMBS (Commercial Mortgage-Backed Securities)

• Agencies (Freddie Mac, Fannie Mae for multifamily)

  
  

Features:

• Fixed or floating interest rates

• Amortization over 20–30 years

• Lower rates than bridge loans

Best For: Long-term hold investors, stabilized income properties, refinances.

3. Construction Loans: Ground-Up or Major Renovation Financing

Construction loans provide capital for ground-up developments or heavy renovations. These are typically interest-only during construction and then either paid off or converted into a permanent loan.

Types:

• Bank construction loans

• Debt funds for speculative projects

• Construction-to-perm financing

Best For: Builders, developers, or investors involved in ground-up commercial projects or extensive renovations.

4. SBA 504 and SBA 7(a) Loans

The Small Business Administration (SBA) offers two popular programs for owner-occupied commercial real estate:

SBA 504 Loans:

• For fixed assets (real estate, equipment)

• Up to 90% financing

• Below-market fixed interest rates

SBA 7(a) Loans:

• More flexible use of funds (working capital + real estate)

• Up to $5 million

• Great for small business owners buying or expanding facilities

Best For: Small business owners purchasing or improving their own buildings.

5. Hard Money Loans: Private Asset-Based Lending

Hard money loans are privately funded, asset-based loans that provide fast capital for high-risk or unconventional projects.

Features:

• High interest rates

• Short terms (6–24 months)

• Minimal income documentation

Best For: Investors who need funding fast, have poor credit, or are doing major rehabs.

6. CMBS Loans (Commercial Mortgage-Backed Securities)

CMBS loans are packaged into securities and sold on the secondary market. They are non-recourse and offer attractive terms for stabilized, income-producing properties.

Best For: Borrowers seeking fixed-rate, long-term, non-recourse financing for office, retail, or industrial assets.

7. Mezzanine and Preferred Equity Financing

When senior debt doesn’t cover all project costs, mezzanine loans or preferred equity fill the gap in the capital stack.

• Mezzanine Debt: Secured by ownership interest in the property, not the property itself.

• Preferred Equity: Investors receive a fixed return before equity partners get paid.

Best For: Large commercial projects needing more leverage without giving up control.

How Amerimort Can Help

At Amerimort.com, we specialize in matching borrowers with the best financing options for their specific needs. Whether you're an investor, developer, or business owner, we can:

• Structure custom CRE financing solutions

• Connect you to banks, private lenders, life companies, and SBA lenders

• Help with loan packaging and submission

• Guide you through every stage of the financing process

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Get Started Today

If you're looking to buy, build, or refinance commercial real estate in Texas or anywhere nationwide, contact us today for a free consultation.

📞 Call: 832-607-1113📧 Email: george@amerimort.com🌐 Visit: www.amerimort.com