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BUSINESS FINANCING GLOSSARY

Cap Rate (Capitalization Rate)

A property’s net operating income divided by its value, as a percentage. CRE lenders use it to gauge return and risk.

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Related terms

Bridge Loan→Short-term financing that “bridges” a gap until a longer-term solution or expected cash arrives — e.g. funding a property purchase before a sale closes.Commercial Real Estate (CRE) Loan→Financing to buy, build, or refinance income-producing or owner-occupied commercial property. Structures range from SBA 504 to bridge and hard-money.Hard Money Loan→Short-term, asset-based real estate financing from private lenders, priced higher but funded fast and underwritten on the property and your equity rather than income.

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