Why Understanding the Types of Commercial Lending Matters
Knowing the types of commercial lending can make or break your next deal if you’re a business owner or real estate investor. Unlike residential loans, commercial loans are designed for businesses, investors, and organizations. They cover everything from buying an office building, financing equipment, or bridging a short-term cash flow gap.
At Gustan Cho Associates, we specialize in both residential and commercial financing with no lender overlays. That means we can approve loans that other lenders deny. In this guide, we’ll walk you through all the different types of commercial lending available in 2025, so you can choose the right one and move forward with confidence.
How Commercial Lending Differs From Residential Lending
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Many borrowers assume a residential mortgage loan officer automatically understands commercial loans. That’s not the case. Residential mortgages are highly regulated under agencies like HUD, Fannie Mae, Freddie Mac, VA, and USDA.
Commercial lending operates under distinct rules compared to consumer mortgages. Unlike residential loan officers, most commercial loan officers do not need a SAFE Act or NMLS license.
Commercial loans are not subject to the same regulations as those of the CFPB. Borrowers in the commercial sector are generally considered more sophisticated and are expected to undertake their own due diligence. This allows for a more flexible negotiation process regarding loan terms, fees, and interest rates, which are often arranged directly between the borrower and lender.
Because of these differences, working with an experienced commercial lender is critical.
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Popular Types of Commercial Lending in 2025
SBA Loans: Government-Backed Support for Small Businesses
One of the most common types of commercial lending is an SBA loan. Backed by the U.S. Small Business Administration, these loans are designed to help entrepreneurs who may not qualify for traditional bank financing.
Key Features of SBA Loans in 2025:
- Down payments as low as 10%.
- Extended repayment periods (up to 25 years for property).
- Flexible uses: equipment, working capital, refinancing debt, or buying property.
- Popular programs: SBA 7(a) loans and SBA 504 loans.
Borrowers who want low rates and long terms should consider SBA loans first.
Asset-Based Lending: Borrowing Against Business Assets
Asset-based lending allows businesses to get loans backed by their own assets, such as inventory, equipment, unpaid customer invoices, or property.
Best For:
- Businesses with valuable assets but tight cash flow.
- Companies with growth opportunities that need quick working capital.
Example: A manufacturer with $1 million in receivables can use asset-based lending to access $700K–$800K immediately instead of waiting months for clients to pay.
This type of commercial lending is especially useful in 2025 as businesses face higher interest rates and tighter liquidity.
Accounts Receivable Financing: Fast Cash Flow Solutions
Accounts receivable financing, often called factoring, is a superb option for businesses looking for cash flow. With this approach, companies can get money against their unpaid invoices. Normally, they can access about 70% to 85% of what they’re owed, which is helpful when they’re waiting on client payments.
One of the best things about accounts receivable financing is how fast it works; businesses can often get funding in just a few days. This quick process makes it one of the speediest types of commercial lending, allowing companies to handle payroll, pay vendors, or tackle urgent expenses without waiting around.
Bridge Loans: Short-Term Commercial Financing
Bridge loans are a temporary financing option until long-term funding is secured.
Key Features:
- High interest rates compared to SBA or bank loans.
- Quick approval and funding, often within weeks.
- Secured by the property or project itself.
Temporary financing can be beneficial in several scenarios. For instance, it allows investors to purchase a commercial property promptly before securing permanent financing. Additionally, it can provide necessary funds to cover construction expenses. At the same time, the property stabilizes, ultimately preparing it to qualify for long-term financing.
Bridge loans are popular in fast-moving real estate markets where timing is everything.
Who helps real estate investors find the best loan type?
Gustan Cho Associates works with over 280 wholesale lenders nationwide.
Hard Money and Private Money Loans
Hard money loans are funded by private investors, not banks. They are based more on property value than the borrower’s credit or income.
Why Borrowers Use Hard Money Loans:
- Fast approvals (as little as 7–10 days).
- Flexible underwriting — no strict credit or income checks.
- Great for investors who need quick cash to close deals.
The downside is higher interest rates and shorter terms. However, for borrowers who need to close quickly, hard money is one of the most flexible types of commercial lending available.
Commercial Real Estate Loans
Commercial real estate loans finance properties such as office buildings, warehouses, hotels, shopping centers, or apartment complexes.
What Makes Them Different From Residential Loans:
- Loan terms are shorter (5–20 years).
- Amortization may not match the term, so a balloon payment may be created.
- Lenders focus on the property’s income potential more than the borrower’s income.
With high demand for multifamily and mixed-use properties in 2025, commercial real estate loans remain one of the most sought-after types of financing.
Construction Loans: Building Projects from the Ground Up
Construction loans are a type of commercial loan used to cover the costs of building or renovating a property. They’re really important for developers and investors who want to kick off new construction projects or make major updates to existing buildings.
Construction loans stand out due to their tailored risk structures and draw schedules aligning with the construction timeline. This type of financing typically covers various expenses, including materials, labor, and permits, ensuring that projects are adequately funded from start to finish.
Key Features in 2025:
- Short-term loans, typically 12–36 months.
- Interest-only payments during construction.
- Funds are released in stages (called “draws”) as work is completed.
Borrowers often refinance into permanent commercial mortgages after construction is complete.
Business Lines of Credit
A business line of credit is one of the key types of commercial lending that offers companies ongoing access to funds, functioning similarly to a credit card but typically with higher limits. This financial product allows businesses to draw money as needed, giving them control over their borrowing. Whether for operational needs or new opportunities, a line of credit provides the flexibility that many businesses require.
One of the big perks of having a business line of credit is that companies only pay interest on the money they actually use. This is extremely beneficial for companies that face fluctuations in cash flow, such as those that operate seasonally. It lets them handle unexpected costs or get through times when sales drop without piling on a ton of debt.
By 2025, fintech lenders have transformed the landscape of business lines of credit, making them easier to access through streamlined online applications and quicker approval processes. This development has opened new avenues for businesses seeking financial support, further enhancing the variety of options available in the types of commercial lending.
Specialty Commercial Loans (Church, Healthcare, and More)
Some lenders, including Gustan Cho Associates, specialize in niche commercial loans:
- Church financing for houses of worship.
- Healthcare loans for medical practices, dental offices, and clinics.
- Franchise loans for business owners expanding into proven models.
These unique types of commercial lending are tailored to industries with specific needs.
How to Choose the Right Type of Commercial Loan
When deciding between the many types of commercial lending, consider:
- Purpose of the loan (buy property, cover payroll, fund construction).
- Timeframe (short-term cash vs. long-term financing).
- Collateral available (real estate, receivables, equipment).
- Credit and financials (traditional vs. alternative financing).
Working with an experienced broker like Gustan Cho Associates ensures you’re matched with the right lender and loan type — even if you’ve been denied elsewhere.
Build Wealth With the Right Loan
The right financing can maximize your returns and expand your portfolio.
Why Work With Gustan Cho Associates for Commercial Lending
At Gustan Cho Associates, we are known nationwide for:
- No lender overlays on commercial or residential loans.
- Access to over 280 wholesale investors.
- Approvals for borrowers other lenders deny.
- Expertise in both traditional and non-QM financing.
Borrowers who need a five-star national mortgage company licensed in 50 states with no overlays and who are experts on the types of commercial lending, please contact us at 800-900-8569, text us for a faster response, or email us at alex@gustancho.com. Whether you need an SBA loan, a bridge loan, or a hard money deal to close fast, our team will guide you step-by-step.
Final Thoughts
The types of commercial lending available today give business owners and investors more flexibility than ever. From government-backed SBA loans to fast-funding hard money, there’s an option for every borrower.
At Gustan Cho Associates, we take pride in helping clients nationwide find the right loan — even if they’ve been denied elsewhere. If you’re ready to explore your options, contact us today and let our team guide you to the right commercial financing solution.
Frequently Asked Questions About the Types of Commercial Lending:
Q: What are the Main Types of Commercial Lending I Should Know About?
A: The main types of commercial lending are SBA loans, asset-based loans, accounts receivable financing, bridge loans, hard money loans, construction loans, commercial real estate loans, and business lines of credit.
Q: Which Types of Commercial Lending are Best for Small Businesses?
A: SBA loans and business lines of credit are the most common types of commercial lending for small businesses because they offer lower rates and flexible terms.
Q: Can I Get Approved for the Different Types of Commercial Lending with Bad Credit?
A: Yes, some types of commercial lending, like hard money loans or asset-based loans, don’t focus as much on credit scores. They use collateral like property or equipment instead.
Q: How Fast Can I Get Money with the Different Types of Commercial Lending?
A: Some types of commercial lending, like hard money loans or cash advances, can be funded in a week or less. Others, like SBA loans, may take several weeks or months.
Q: What Types of Commercial Lending are Used to Buy a Building?
A: When it comes to financing a building, commercial real estate loans and SBA 504 loans are the go-to options for most people.
Q: Are All Types of Commercial Lending Expensive?
A: Not all. Some types of commercial lending, like SBA loans, have low rates. Others, like bridge or hard money loans, cost more because they are short-term or higher risk.
Q: What Types of Commercial Lending Can Help Me if I Need Quick Cash for My Business?
A: If you need fast cash, the best types of commercial lending are accounts receivable financing, cash advances, or hard money loans.
Q: Can New Businesses Qualify for the Different Types of Commercial Lending?
A: Yes, new businesses can qualify for some types of commercial lending, especially SBA startup loans and asset-based lending.
Q: How do I Know Which Types of Commercial Lending are Right for Me?
A: The right types of commercial lending depend on your goal. For example, if you want to buy property, look at SBA or commercial real estate loans. If you need working capital, consider asset-based loans or lines of credit.
Q: Where Can I Apply for the Different Types of Commercial Lending?
A: You can apply for all types of commercial lending with Gustan Cho Associates. Call us at 800-900-8569 or email gcho@gustancho.com to get started.
This article about “Types of Commercial Lending For Real Estate Investors” was updated on August 27th, 2025.
Do I need tax returns or income verification for commercial loans?
Not always—DSCR and stated-income programs are available.
Gustan Cho Associates can approve commercial loans from $150,000 to $1,000,000 in as little as 24 hours. Our simple loan application process requires only a few bank statements, rather than extensive paperwork and complex financial information. So before you know it, you’ll have the funding in your business bank account!