Real estate business loans help companies acquire, develop, or refinance commercial properties. From owner-occupied buildings to investment properties, understanding your financing options enables strategic real estate decisions that support long-term business growth.
Types of Commercial Real Estate Loans
Commercial real estate financing comes in various forms, each suited to different property types, use cases, and borrower qualifications. The right loan type depends on your specific situation and goals.
Key Consideration: Owner-occupied properties (where your business uses 51%+ of the space) often qualify for SBA loans with favorable terms. Investment properties typically require conventional or portfolio loans.
Commercial Real Estate Loan Options
SBA 504 Loans
SBA 504 loans offer up to 90% financing for owner-occupied properties with fixed rates and terms up to 25 years. The low down payment and competitive rates make this the preferred option for qualifying businesses.
Conventional Commercial Mortgages
Traditional bank loans typically require 20-25% down payment with 5-20 year terms. They work for both owner-occupied and investment properties, with rates based on property type, loan-to-value, and borrower strength.
Commercial Bridge Loans
Short-term bridge financing enables quick acquisition or provides capital during property stabilization. Higher rates but faster closing—ideal for time-sensitive opportunities or properties needing improvement before permanent financing.
Hard Money Loans
Asset-based loans focus on property value rather than borrower qualifications. Higher costs but accessible for borrowers with credit challenges or properties that don't qualify for conventional financing.
Qualification Factors
Property Type and Location
Lenders assess property type (office, retail, industrial, multi-family), condition, and location. Properties in strong markets with stable tenants qualify for better terms.
Debt Service Coverage Ratio
Lenders typically require DSCR of 1.20-1.25x, meaning property income covers loan payments with 20-25% cushion. Strong cash flow from the property or business supports approval.
Borrower Experience and Credit
Real estate experience, personal credit (typically 680+), and net worth influence approval and terms. First-time commercial borrowers may face stricter requirements.
Explore Real Estate Financing
Get connected with lenders who specialize in commercial real estate for your business needs.