What is a commercial real estate loan?
A commercial real estate loan finances the purchase, refinance, construction, or improvement of business property. It is secured by the property and underwritten on DSCR, LTV, borrower strength, and market risk.
How much do I need for a down payment on commercial property?
Down payments typically range from 10% (SBA 504 for owner-occupied) to 20–35% (conventional). Special-purpose assets or newer businesses may require more.
What DSCR do lenders usually require?
Many lenders look for a minimum DSCR of about 1.20–1.35x for owner-occupied and 1.25–1.40x+ for investment property, depending on risk and market conditions.
How long does a commercial mortgage take to close?
Conventional loans commonly take 45–75+ days, SBA 504 can take 60–90+ days, and bridge loans can be faster when documentation and collateral are straightforward.
What are typical terms for a commercial mortgage?
Terms often run 5–10 years with 20–25 year amortization. Balloons are common. Rates can be fixed or variable and depend on market indices and risk.
Can I finance improvements and equipment with my CRE loan?
Yes, many programs allow improvements. For equipment, consider pairing CRE financing with dedicated Equipment Financing to align repayment with asset life.
Is SBA 504 only for owner-occupied properties?
Yes. SBA 504 is designed for owner-occupied real estate and certain equipment. At least 51% of the building must be occupied by the operating company.
