A permanent commercial loan is defined as a first mortgage on a piece of commercial property that has
- Some amortization
- A term of at least five years
Most commercial permanent loans are amortized over 25 years. If the property is more than 30 years old and/or showing signs of wear and tear, many banks will insist on amortizing their commercial permanent loans for 20 years.
Permanent loans usually enjoy the lowest interest rates among the various type of commercial real estate loans. In large part this is because permanent loans are usually garden variety loans, with no special risks in the deal. The property has already been constructed and almost completely leased out.
Permanent Commercial Lenders
These are the most common types of permanent commercial lenders:
Life Insurance Companies
Life insurance companies typically have a minimum loan size of $5 million.
Like life insurance companies, conduits typically have a minimum loan size of $5 million. Some conduits will make permanent loans as small as $3 million.
Compared to life insurance companies and conduits, banks are far more flexible about commercial loans sizes. They will make commercial permanent loans, ranging from $100,000 to $100 million.
What does this mean for you?
You should take small commercial loans to small banks and large commercial loans to large banks. Credit unions usually have a maximum commercial loan size of $1 million to $2 million.
For more consultation for permanent commercial loans, contact us today at (732) 228-8088. We can help you secure a permanent loan on your commercial property.