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Types of Loans PDF Print E-mail

apartment commercial loansWorld Net Capital I offers various types of commercial loans to meet your diverse business needs. Loans are usually secured with collateral (business-owned or personal assets) and require some amount of equity from the business owner. We offer conventional commercial loans with fixed and variable interest, federally guaranteed loans, including SBA 504 loans and B&I loans, and hard money loans. Loans can be used to start up a new company, purchase inventory or new equipment, fund new construction, perform renovations and repairs, buy existing businesses, buy a commercial building for new or existing business, expand an existing business, refinance an existing mortgage, cover emergency expenses, and to provide investment capital. We offer loans for owner-occupied businesses and investor owned businesses, and provide equipment lease financing. Please call us if you need help with your business loan needs.

 

The commercial loan products we offer may be used for many property types, including: office, retail, multifamily, warehouse, light industrial, medical, day care, hotels, church, funeral homes, and many others. Please visit our property types webpage for a more complete listing of eligible properties. We do not offer our commercial loan products for gas stations, raw land, or golf courses, to name a few.

 

Our typical loan products include the following:

 

Construction Loans - an interim loan for the construction and development of a property, secured by the mortgage on the property. Funds are advanced at specific stages of construction, called progress payments, with a portion held back until completion of the project, a certain portion of the building has been leased, or other criteria have been met. A construction loan is typically paid off from the proceeds of a permanent mortgage after construction is complete. The land, the improvements, and other tangible assets can be used as collateral.

 

Acquisition Loans – acquisition loans are used to buy property with an established business. These loans may also be used for chattel and security assets. In any event, the rights and ownership must be passed to the new owner. Many business owners often already own the same type of business and wish to expand and increase their revenue. In this case the business owner usually has the specific expertise required to manage the new business. Or, this loan may be on a new business for an experienced business person, or a new business owner. We do not offer loans on raw land.

 

Asset Based Loans - asset based loans are used for any commercial purpose and are secured by the business' balance sheet assets, such as inventory, receivables, or collateral other than real estate. Most of our loans will require real estate collateral for security.

 

Bridge Loans - bridge loans are temporary loans that provide immediate cash until permanent financing can be obtained. Bridge loans are short-term loans often used to develop or acquire a new business when the owner has to act fast. These loans are usually used to start a project while the owner is waiting for the senior debt financing to close. The property may be in transition and does not yet qualify for conventional financing, so the interest rates are usually higher than for conventional commercial loans.

 

Debt Consolidations Loans - these loans are used to pay off two or more other loans to combine them into one payment, often at a lower interest rate. They usually result in lower monthly payments by consolidating the debts into one loan with one payment. The best time to get these loans is when interest rates are lower that the rates on the existing loans. Assets used for collateral on the original loans are passed to the new loan.

 

Development Loans – development loans are used to expand or improve a property.

 

Construction Improvement /Rehab Loans - loans used to buy an existing property for the specific purpose of rehabilitating the property, repairing deficiencies, remodeling, or improving the condition for reuse or resale.

 

Refinancing Loans - refinancing loans are obtained to pay off existing debt, using the same collateral on the new loan. These loans are usually obtained when interest rates are lower or terms of the new loan are better than the original. Many business owners refinance existing loans when they need to lower the monthly payments on their loans by getting a lower interest rate and/or amortizing the loan over a longer period.

 

Second Mortgage Loans – a loan on the equity that you have in your business above and beyond the principal remaining on your primary commercial loan. This loan is usually made by borrowing against the paid-down loan principal, and is used when you need extra funds for a new project at your business, you want to make improvements to a property, or you want to expand your business without taking out an additional commercial loan. If your business now has a higher value than the remaining loan principal, you may be able to obtain a second mortgage on the difference, using the equity you have in your business. Approval rates for second mortgages are typically higher than for first-time commercial loans, and often at lower interest rates.

 

SBA Loans - an SBA Loan (Small Business Administration) is a loan which the federal government backs with a guarantee, thus making it easier to secure. You must meet SBA’s definition of small business and fulfill all of their requirements to qualify for an SBA loan. A big advantage of an SBA loan is that it will provide funds up to 90% of the property value. The interest rate will be the weighted average of the interest on the SBA loan portion and the interest on the commercial lender loan portion.

 

B&I Loans – Business and Industry Guaranteed Loans, or B&I loans, are available for development of businesses in rural areas. The purpose of these loans is to promote rural employment, to conserve and protect our natural resources, and to reduce use of nonrenewable energy. These loans are guaranteed by the US Department of Agriculture. You must be a US citizen, or the business entity must be at least 51% owned by a US citizen.

 

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