Commercial Property Loans
A commercial property loan is long-term financing secured by income-producing or owner-occupied commercial real estate such as retail, office, industrial, or mixed-use buildings.
It fits investors holding stabilized properties and business owners buying or refinancing the building they operate from.
Commercial Property Loans quick facts
These are the typical terms for commercial property loans. Your actual terms depend on underwriting.
| Typical amount | $250,000 to $25,000,000+ |
|---|---|
| Typical term | 5 to 25 years, amortization up to 30 years |
| Typical funding speed | Typically 30 to 60 days |
| Typical minimum requirements | Up to 65% to 80% LTV, 1.20x to 1.35x DSCR, 660+ credit |
| Cost structure | Fixed or variable interest rate, plus lender and third-party fees |
Commercial Property Loans: good fit or not?
This option works well for some situations and is a poor match for others.
Good fit
- Stabilized retail, office, industrial, self-storage, and mixed-use properties
- Business owners buying their own building
- Refinancing maturing commercial debt
- Cash-out refinances on properties with strong income
Not a good fit
- Properties in heavy transition (consider a bridge loan)
- Raw land without a near-term plan
- Residential 1 to 4 unit rentals (see DSCR loans)
Documents usually needed
Having these ready typically speeds up review. A funder may request additional items.
- Rent roll and copies of major leases
- Two to three years of property operating statements
- Purchase contract or current loan statement
- Personal financial statement and schedule of real estate owned
- Business financials (for owner-occupied properties)
- Entity documents
Commercial Property Loans: how it works
The process typically follows 4 steps from first conversation to funding.
Submit property details
Share leases, operating history, and your goals.
Review terms
We compare bank, credit union, CMBS, life company, and private options that may fit.
Underwriting and reports
Appraisal and third-party reports are completed.
Close
Sign loan documents and close.
Commercial Property Loans vs. Bridge Loan
The main difference comes down to structure, cost, and timing. Here is how they typically compare.
| Feature | Commercial Property Loans | Bridge Loan |
|---|---|---|
| Property condition | Stabilized | Transitional |
| Typical term | 5 to 25 years | 12 to 36 months |
| Rate | Lower | Higher |
| Typical speed | 30 to 60 days | 2 to 4 weeks |
Typical characteristics. Terms vary by funder and file.
Commercial Property Loans FAQs
What property types can be financed?
Common property types include retail, office, industrial, warehouse, self-storage, mixed-use, hospitality, and special purpose properties. Availability depends on the funder.
What is the difference between owner-occupied and investment commercial property?
Owner-occupied means your business uses most of the building, which may open SBA and bank programs. Investment property is leased to third-party tenants and underwritten mainly on rental income.
What is a balloon payment?
Many commercial loans have a term shorter than the amortization period, so the remaining balance is due at maturity as a balloon payment, usually paid through a refinance or sale.
What third-party reports are required?
Most loans require an appraisal. Many also require an environmental report and a property condition report, depending on the property and loan size.
Can I get cash out on a commercial refinance?
Often, yes, subject to leverage and debt coverage limits set by the funder.