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Commercial Real Estate Loans vs. Commercial & Industrial Loans

Commercial Real Estate Loans Vs Commercial And Industrial

Many businesses need financial assistance to pursue company growth. Commercial & Industrial (C&I) and Commercial Real Estate(CRE) loans are the two most common business lending options. This article will explain the differences between C&I and CRE.

What Are C&I Loans & CRE Loans?

A commercial and industrial loan (C&I) is for businesses, corporations, or partnerships. Organizations can use their funding for day-to-day operations, renovations, technology acquisition, inventory, machinery, etc. A commercial real estate loan (CRE) is used by small to medium-sized businesses, corporations, partnerships, and investors to purchase real estate properties.

Features Of C&I Loans

  • These are for working capital, business expenses, or capital expenditures.
  • There are many types, including secured & unsecured, asset-based, & those guaranteed by the U.S. Small Business Administration.
  • Lenders issue them as a lump sum or line of credit.
  • Most require collateral—for example, assets or property.
  • They are short-term, offering a few years for repayment.
  • Many have a variable rate—typically higher than other lending types.

Pros Of C&I Loans

  • They are often easier to obtain.
  • They’re an excellent source of funding for various business expenses.
  • Start-ups & small businesses can rely on something other than equity.

Features Of CRE Loans

  • CRE loans are for purchasing, renovating, or expanding commercial properties.
  • Common types include permanent funding for first mortgages & funds guaranteed by the U.S. Small Business Administration. Some lenders provide short-term bridge or hard money loans.
  • Lenders issue them as mortgages.
  • Businesses must put up the property as collateral.
  • CRE funding is long-term, from five to twenty years, with longer amortization periods—businesses also have access to short-term bridge loans.
  • They have a variable or fixed rate, typically low compared to other loans.

Pros Of CRE Loans

They’re an excellent way to purchase commercial properties or expand & renovate current commercial properties.
Businesses don’t need to sell shares or stocks on equity markets to raise funds.
Hard money lending options offer less strict qualification criteria.

Is A C&I Or CRE Loan Right For Your Business?

Your business’s current situation and objectives determine whether a Commercial & Industrial or a Commercial Real Estate Loan is the right choice. If you need inventory, equipment, or staff, a C&I loan may be an excellent choice. Alternatively, you may select CRE lending to purchase real estate.

Let Us Help With Your C&I & CRE Funding

Interested in CRE lending for your business? NV Capital Corporation is a trusted hard money lender. Find out how we can help you access CRE funding more easily!

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