Due to the ongoing effects of the global pandemic, today’s interest rates are still being held down. Despite the hard time we are experiencing now, this is actually the right time for small business owners to take advantage of low commercial real estate loan rates.
One of the factors that determine your interest rate is the kind of the commercial real estate loan you select. So, how much are the average commercial real estate loan rates? Is it the same amount as the cheapest car insurance?
Average Commercial Real Estate Loan Rates for 2022
The average commercial real estate loan rates are around 2.2 percent to 18 percent. The actual interest rate you secure will depend on 3 factors, which are the type of project or building you are funding, the type of loan you select, and your qualifications as a borrower.
This table below shows you the most common commercial real estate loan types as well as the average rates.
|Type of Loan||Average Rates|
|SBA 7(a) Loan||5.5 percent to 8 percent|
|SBA 504 Loan||2.372 percent to 2.912 percent on commercial development company portion and 4 percent to 10 percent on lender portion.|
|Conventional Bank Loan||5 percent to 7 percent|
|Hard Money Loan||Starts from 4.75 percent|
|Online Marketplace Loan||8 percent to 12 percent|
The interest rates on a commercial real estate loan can be as low as 2.231 percent, depends on the type of loan you choose.
Government-supported loans like Small Business Administration (SBA) loans or USDA loans from the Department of Agriculture, and conventional commercial mortgages generally will offer the highest loan-to-value (LTV) ratios as well as the most competitive interest rates. SBA 7(a) Loan is its most famous loan program.
It is easier and quicker to get this type of SBA loan compared to other SBA loan types. While the application process for a conventional bank loan takes a lot of time and documentation to complete.
South End Capital is a great option if you are searching for a commercial real estate loaner. South End Capital offers mortgages for investment and commercial residential properties, special-purpose properties, rural locations, and also land loans.
Those are the average commercial real estate loan rates for 2022. As you can see, each commercial real estate loan has its own benefits and drawbacks. So, it is important to consider your needs and financial ability to choose the right one.