What does a package loan finance?

A package loan is designed to finance both real and personal property, making it a versatile financing option. This type of loan typically combines the purchase of real estate with personal property that may be associated with the real estate, such as furniture, fixtures, or equipment.

For instance, if someone is buying a commercial building along with the necessary furniture and equipment to operate their business, a package loan allows them to secure financing for both the property itself and the personal property in a single loan arrangement. This is beneficial as it simplifies the financing process, consolidating costs into one loan rather than requiring separate financing for the real property and the personal property.

This understanding of how package loans work highlights their comprehensive nature, which is why they serve the purpose of financing both types of properties rather than being limited to just one category.