Commercial Real Estate Loan

A commercial real estate loan can help you finance business property. These loans are typically made to a developer, trust or corporation, but an individual can also borrow one.

In general, lenders look for solid credit, a low loan-to-value ratio, and an average net operating income (NOI) to determine approval odds. 후순위담보대출


Commercial real estate (CRE) loans are mortgages that allow business owners to invest in income-producing properties used for their operations. They can be used to purchase, construct, or renovate existing property, and they can also be used to refinance an existing loan. Typically, CRE loans are made to business entities like corporations, developers, funds, or trusts that have been formed for the purpose of investing in real estate. However, individual borrowers can also use these loans to finance the purchase of commercial property.

The types of commercial real estate loans vary by lender and loan program, but there are several general categories to consider. For example, term loans offer a lump sum of capital that you repay in regular installments over an agreed-upon period of time. These loans are common among commercial lenders and offer competitive interest rates.

Bridge loans provide short-term financing that can help you compete with all-cash bidders for a property. They typically have short terms and are offered at higher interest rates than other commercial real estate loans. In most cases, a commercial bridge loan must be repaid in full or converted to a long-term loan within a few years.


When applying for a Commercial real estate loan, borrowers must prepare extensive documentation that shows their assets, debts, income and credit profile. Additionally, lenders may require that a business be in operation for several years to qualify. Because of these requirements, it’s important to consider your options carefully before choosing a lender.

Generally, a commercial real estate loan is used to buy, build or renovate property that will be used for the business’s operations. Business owners can get these loans through banks, private lenders and online lenders. The loan terms of a CRE loan tend to be much shorter than those of personal mortgages, typically with an amortization period of five to 20 years. At the end of the term, a borrower can choose to pay off or refinance the loan.

While the exact qualifications for a Commercial real estate loan will vary by lender, most businesses will need to meet a minimum credit score and income requirements. Additionally, the borrower will need to show that the commercial property has adequate cash flow to cover the mortgage. This is known as the debt-service coverage ratio (DSCR). Lenders typically look for a DSCR of at least 1.25, although lower ratios may be acceptable for shorter amortization periods and properties with stable cash flows.

For small business owners seeking quick funding to compete with all-cash buyers on a piece of commercial property, a bridge loan is an option. These short-term loans often come with high interest rates and must be paid off once the property is sold or refinanced.


Commercial real estate loans are offered by a variety of lenders. These include banks, independent mortgage companies, financial institutions and private investors. In addition, the Small Business Administration offers loans through a Certified Development Company. These are usually reserved for smaller businesses and provide financing up to $25 million.

The requirements for a commercial real estate loan can vary from lender to lender. However, many lenders will require a minimum business credit score of around 660-680. The business must also have been in operation for at least two years, and its gross income should exceed its total debts. Additionally, the lender will want to know whether it has adequate cash flow to pay back the loan.

To qualify for a commercial real estate loan, the business must also have enough money to put down a substantial down payment on the property. This is to protect the lender in case the borrower defaults on payments and tries to sell the property. The down payment required can range from 15%-35% of the value of the property, depending on the lender.

Another important requirement for a commercial real estate loan is that the business must be owner-occupied. This means that the business must occupy at least 51% of the property. If the business isn’t going to occupy the property, it will need to apply for a construction or investment property loan instead.


In addition to reviewing the borrower’s creditworthiness, lenders also examine the underlying property thoroughly. This is because commercial properties such as hotels, event venues and even multi-tenant buildings promise to bring in a lot of money.

Unlike residential mortgages, which are made to individuals, commercial loans are made to business entities such as s-corporations and limited liability companies. They are inherently riskier for lenders since if a business fails, the lender is out a substantial sum of money. Therefore, lenders typically require higher credit scores and a larger down payment.

The length of a commercial real estate loan is another important consideration. Typically, the repayment term is set for five years or less, but it can be extended to 25 years in certain cases. However, it is important to note that the amortization period is longer than the term.

Short-term financing solutions like hard money and bridge loans are often available to borrowers who don’t qualify for conventional commercial property loans. These types of financing typically have high interest rates but are quick to close. They can also be used as a bridge to long-term financing, such as a commercial mortgage. Ultimately, it is important to determine the best financing solution for you and your business. You can do so by comparing different lenders, their rates, fees and qualification requirements.