A Business Purpose Loan is financing used for investment or commercial activities—not personal or household use. In real estate, it typically funds fix-and-flips, rental properties, commercial projects, or short-term bridge loans.
Because it’s not for a primary residence, this type of loan is usually exempt from consumer lending laws like TILA and RESPA, allowing for faster approvals, flexible terms, and asset-based underwriting.
Common uses include:
– Purchasing or refinancing investment properties
– Renovating income-producing real estate
– Bridge financing
– Cash-out loans for business needs
Business purpose loans are often secured by real estate and evaluated based on the property’s value and potential—not just the borrower’s credit.
« Back to Glossary Index
