Mini Perm Loans

Mini Perm Loan: This is a type of temporary financing used in the commercial real estate industry. A mini perm loan is short-term financing typically used to pay off an outstanding construction or commercial property loan. They are typically obtained to provide a period of time after completion of a project during which the property can establish its occupancy and income history, making it easier to secure longer-term financing.

A mini perm loan usually has a term of three to five years, with balloon payments at the end. During this term, the borrower can either choose to pay only the interest on the loan or make payments towards the principal as well. At the end of the term, the outstanding balance is usually refinanced with a longer-term loan.

These loans are often used when the borrower wants more time to meet the prerequisites for a permanent loan, such as demonstrating a stable cash flow from the property, or improving their own credit situation. They can also be useful in situations where the borrower anticipates a significant increase in the property's value over a short period of time.