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C&I Loans ( Commercial Loans and Industrial Loans)
There are commercial loans and industrial loans that starts with 5 million dollars and it is being offered by providers of commercial real estate loans. The purpose of commercial and industrial loans is not for individual use but for capitalization of a business, capital expenditures, legitimate business financing requirements, and working capital. Commercial and industrial loans are only allowed for a short term and you need to have a non-real-estate collateral to avail of it.
What are CRE loans and how are they different from C&I loans?
One thing that these loans have in common is that they are specifically made to improve the financing of business enterprises. Nevertheless, you can still say that these loans differ in some ways.
How Can You Acquire Commercial Real Estate Loans?
Commercial real estate loans are intended for income-generating properties like apartment buildings, hotels, retail stores such as the shopping centers, and office buildings among others. It is easier to obtain a commercial and industrial loan compared to a commercial real estate loan because the real estate world is unpredictable making the income unstable as well. The commercial real estate loans and the commercial and industrial loans can overlap each other if there is a refinancing asset loan that needs to be made to improve the income of the property.
Commercial real estate loans are composed of these characteristics:
This type of loan is purposefully used for the recovery, refinancing and construction of commercial real estate properties.
Commercial real estate loans have lower loan to value ratio than that of a home mortgage.
You can adjust the rate of your commercial real estate loans since you can be able to pay a huge amount for it all at once and that is known as the balloon payment.
Commercial real estate loans can be extracted from an existing property to an additional property that you have to refinance.
There are short-term loans for your commercial real estate loans and you can replace this with a permanent commercial loan.
Commercial and industrial lending
There are a lot of business sectors that are able to avail of the services of a commercial and industrial loans including manufacturers, retailers, professional firms, industrial companies, health care providers and hospitality companies like motels and hotels among others.). The characteristics of commercial and industrial loans are as follows:
These loans are used for capital expenditures such as the hiring of workers, purchasing of equipment and filling seasonal gaps.
You can not collateralize your commercial and industrial loan if it is used for a construction activity but for this purpose, it would still be better to utilize the commercial real estate loan.
Even if you cannot secure your commercial and industrial loan with a real estate collateral, you can still secure it using your credit card receipts, assets like the equipment in your business establishment, or your accounts receivable.