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!