Commercial Loans
Financing for income-producing properties — office buildings, retail spaces, multi-unit apartments, and more. Structured to fit your business goals.
Your next investment shouldn’t be held back by the wrong lender.
What Is a Commercial Loan?
A commercial loan is a mortgage used to finance income-producing or business-use real estate. Unlike residential mortgages that are based primarily on personal income and credit, commercial loans are underwritten based on the property’s income potential, the borrower’s business experience, and overall deal structure.
Commercial real estate financing covers a wide range of property types — multi-family apartments (5+ units), office buildings, retail centers, warehouses, mixed-use developments, and more. Loan structures, terms, and requirements vary significantly based on the property type and your investment strategy.
Who Is This Best For?
Commercial loans serve real estate investors, business owners purchasing their own space, developers, and anyone looking to acquire or refinance income-producing property. Whether you’re buying your first apartment building or expanding a portfolio, commercial financing can be structured to match your goals.
If you’re scaling beyond 1-4 unit residential properties or looking to purchase a property for your business, you’ve moved into commercial territory. The underwriting is different, but the opportunities are significant.
Common Commercial Loan Types
- Multi-family (5+ units): Apartment buildings and large rental properties
- SBA loans: Government-backed financing for owner-occupied business properties
- Bridge loans: Short-term financing for acquisitions, repositioning, or value-add projects
- CMBS loans: Securitized loans for stabilized commercial properties
- Hard money: Asset-based, fast-close options for time-sensitive deals
- Portfolio loans: Flexible terms from banks that hold loans on their own books
Down payments typically range from 20-35%, and terms vary from 5-year adjustable to 25-year fixed depending on the program. The property’s net operating income (NOI) and debt service coverage ratio (DSCR) are the primary qualification metrics.
Key Advantages of Commercial Loans
Property Income Drives Qualification
Unlike residential loans focused on personal income, commercial loans are primarily underwritten on the property’s income potential. Strong cash flow from the property can qualify deals that wouldn’t work with traditional residential underwriting.
Scale Your Portfolio
There’s no limit on how many commercial properties you can finance — unlike residential lending which caps at 10 financed properties. Commercial loans let you grow your real estate portfolio without artificial ceilings.
Flexible Loan Structures
Interest-only periods, balloon payments, adjustable rates, recourse and non-recourse options — commercial loans offer far more structural flexibility than residential mortgages to match your investment strategy.
Entity-Based Borrowing
Borrow through an LLC, partnership, or corporation. This provides liability protection and can offer tax advantages. Most commercial loans are structured this way by default.
Common Questions About Commercial Loans
What’s the minimum down payment for commercial?
Most commercial loans require 20-30% down, depending on the property type and loan program. SBA loans can go as low as 10% for owner-occupied properties. Multi-family (5+ units) typically requires 25%. The stronger the deal and the more experienced the borrower, the more favorable the terms.
How are commercial loans different from residential?
Commercial loans focus on the property’s income rather than your personal income. Terms are often shorter (5-10 year balloons vs. 30-year fixed), rates may be higher, and the underwriting process evaluates the business case for the property. Closing also involves environmental assessments and commercial appraisals.
Can I finance a mixed-use property?
Yes — mixed-use properties (residential units above retail or office space, for example) are common in commercial lending. The financing options depend on the ratio of commercial to residential space and the overall income the property generates.
How long does commercial financing take?
Commercial loans typically take 45-90 days to close, depending on the complexity of the deal, the loan program, and the required due diligence (environmental reports, commercial appraisal, etc.). SBA loans can take longer. Starting early and having your financials organized makes a significant difference.
Let’s Structure Your Commercial Deal
No pressure. No obligation. Just clarity.
Most people start with a quick call — it makes everything easier.
Garry McDonald | NMLS #1922072 | DRE# 01781703 | (949) 534-6686