Those in California who are looking to start a small business may need to get a commercial real estate loan if they want purchase a property to operate out of. These loans can take anywhere from five to 20 years to pay off, and they generally have a balloon payment due at the end of the term. Individuals who are looking for such a loan have many different options to secure funding.
While banks tend to offer the lowest interest rates, they may also have the strictest requirements when it comes to approving a loan application. The Small Business Administration offers to guarantee loans through its 504 and 7 (a) programs. Through the 504 program, a small business can get a commercial loan with a down payment of only 10 percent.
Business owners who are in the market for a commercial loan are advised to give themselves up to 30 days to finalize the process of obtaining it. This will provide the time needed to do due diligence and review any documents associated with the loan. It is important to have a letter of intent ready to show to a lender as it shows a borrower is serious about pursuing the money. The letter of intent should be reviewed by an attorney prior to submitting it.
Obtaining a commercial real estate loan may be a complex and lengthy process. Therefore, it may be best to go through it with the help of an attorney. It may also be worthwhile to have an accountant and other advisers available to provide assistance.