What are the different types of financing used in commercial real estate loans?

In California, there are several different types of financing used for commercial real estate loans. The most common type of financing is debt financing, which is when a lender provides funds to the borrower in exchange for a promise to pay back the loan with interest. This type of financing is often used by businesses, investors, and developers. Equity financing is when an investor provides the funds needed to purchase a property and the borrower pays back the investor with a return on their investment. Another type of financing is mezzanine financing, which is a combination of debt and equity financing. This type of financing permits the borrower to use the funds for investments with higher returns, but the borrower must pay a higher interest rate to the lender. Additionally, there are also sale-leaseback agreements, which allow a borrower to purchase a property and then lease it back to its original seller. Finally, there are government-backed loans, like the Small Business Administration’s (SBA) 504 loan. This loan is available to small businesses and entrepreneurs to help them purchase or improve commercial real estate. It’s a great option for those who may not qualify for traditional lending. Overall, these are the most common types of financing used in commercial real estate loans in California. To determine which type of financing is best for you, it’s important to talk to a skilled real estate attorney and weigh the pros and cons of each option.

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What are the different types of financing used in commercial real estate loans?

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