Commercial Real Estate vs. Term Loans: Compare Business Funding
CRE loans vs. business term loans — compare rates, terms, and use cases for asset-backed vs. general-purpose business financing.
Commercial Real Estate Loan: Commercial real estate loans finance the purchase, renovation, or refinance of income-producing or owner-occupied commercial property. Business Term Loan: A business term loan delivers a fixed lump sum repaid over a set schedule with predictable monthly payments — the classic business funding structure.
Commercial Real Estate Loan vs. Business Term Loan — side by side
| Commercial Real Estate Loan | Business Term Loan | |
|---|---|---|
| Typical amount | $250,000 – $25,000,000 | $25,000 – $2,000,000 |
| Typical term | 5 – 30 years | 1 – 10 years |
| Rate | 6% – 12% APR | 7% – 30% APR |
| Minimum time in business | 2 years | 1 year |
| Minimum credit score | 650+ | 600+ |
Which is right for your business?
- Commercial Real Estate Loan tends to fit best when you need purchase or renovation.
- Business Term Loan tends to fit best when you need expansion or equipment.
Frequently asked questions
Can a term loan bridge to CRE financing?
Specialty bridge products — short-term loans designed for real estate — can bridge a property acquisition before permanent CRE financing is arranged. Standard alternative-lender term loans are not suited for this use.
