A commercial real estate loan is a financial product against a real estate property that is going to be or is being used as a commercial resource for the owner. These can be anything from a coffee shop to a big multi-level firm or simply a tower on rent. Commercial loans are generally issued to only investors, generally the big sharks of the market who already operate commercial real estate. These commercial property loans in India are offered by banks, lenders, pension funds, private investors, and other business administration loan programs.
A term loan is a commercial property loan type where the borrower must pay the total amount within a fixed time frame. If you’re going for the term loan, be mentally & financially ready to pay the amount to meet the deadlines issued at the very start of the deal.
The letter of credit refers to a document that is issued by a financial institution to a lender. The borrower can use this LoC to buy or sell commercial real estate investments. Moreover, the document stands as a guarantor that the borrower will be rightfully regular in the repayment of the loan.
As the name suggests, these loans are completely free of any collateral. They are issued to small and medium-sized enterprises and granted to borrowers on the basis of their profile only. This includes annual income, location of operation, citizenship, age, prior work experience, etc.
This is one of the most popular types of loans where the Bank itself gives a guarantee to repay the money in any odd cases. In any case, if the borrower is unable to repay the money, the bank will take the responsibility of paying it.