In this fluctuating real estate market, many investors, who may be shying away from residential properties, are turning to commercial deals. Maybe your business already owns the building you operate from, or maybe you’re looking to expand by buying a new store front. Regardless of the reason, you can borrow funds against your commercial property, or refinance your commercial property to operate your business, seize new opportunities or improve your bottom line.

There are many lending opportunities for commercial clients. You can speak to your bank, credit unions or private lenders. What’s important is that you look at where your business is now, and where it’s going.

Depending on your goals, you may want to look at the following facilities:

1. Operating loans

An operating loan is typically a short-term loan ideal for helping with day-to-day cash flow. It allows your business to access funds for daily operation, to cover expenses until you get paid. For small businesses, an operating loan can give you breathing room.

2. Construction loans

Construction loans are specifically designed to finance commercial construction. This can include building multi-family units, commercial building, warehouses or retail centres, for example. Construction loans can be an effective tool, as they typically have interest-only payments during the construction phase, and can convert to a fixed-rate mortgage once construction is complete.

Construction loans can, however, be more complicated from a legal standpoint, and it’s important to have a lawyer who understands the process so the funds are not delayed.

3. Term loans

A term loan gets repaid in regular payments over a set period. Term loans can be an effective tool for businesses which are looking to keep growing. They allow you to purchase new assets, expand to new markets and consolidate your debt.

Prerequisites to lending

Purchasing commercial is not for the faint of heart. You also must be prepared to absorb some costs to ensure you will meet lender requirements. Every project should be purchased conditionally on financing and due diligence. Commercial lenders will require an appraisal performed by an appraiser that is satisfactory to the lender. In addition, you will probably be required to have a Phase 1 environmental report and survey prepared. If you are buying to develop, you may want soil tests and planning research as well.

Whether you are looking to buy commercial property, or simply leverage the property you already have, commercial loans can be a flexible and convenient solution to give you the business edge you need. But it is critical you have the right team to help you out. Your banker should provide options to best suit the needs of your business, and your goals. Your lawyer should be familiar with the pitfalls in commercial properties, and be prepared to work with your team to close the deal quickly and efficiently.