Commercial real estate financing is an important and often complex part of the industry. Knowing the difference between small balance and large balance financing can make all the difference when it comes to securing a loan for your project.
Small Balance Financing
Small balance loans are typically used for smaller commercial real estate projects such as purchasing a property, refinancing an existing loan, or making improvements to the property. These loans usually range from $1 million and below, with interest rates that can be fixed or adjustable, depending on your needs and creditworthiness. Smaller balances are often easier to secure than larger loans and they often come with more flexible terms, such as lower down payments and longer repayment plans.
Large balance loans are typically used for projects that require a much larger amount of capital, usually over $1 million, and often ranging into the billions of dollars. These loans can be used for anything from renovations to constructing an entirely new building. The interest rates on these types of loans tend to be higher than on small balance loans, and the repayment plans are often longer with more stringent terms. Large balances also require a greater amount of collateral, such as existing property or other assets, making them more difficult to secure.
The type of loan you choose will ultimately depend on your particular needs and situation. If you are looking for a short-term solution or need more flexibility in the repayment options, then a small balance loan may be best. Artis Commercial Capital provides financing solutions for both small and large development projects. Whether you need $1 million or your project requires funding in the billions of dollars, we have you covered. Contact our team today to learn more.