Commercial real estate financing provides funding to purchase, refinance, renovate, construct, or expand properties used for business or investment purposes. Financing options vary depending on the property, borrower, intended use, and financing provider.

Commercial real estate loans may be available for a variety of property types, including:

• Office buildings
• Retail properties
• Warehouses
• Industrial facilities
• Medical offices
• Restaurants
• Mixed-use properties
• Multifamily properties
• Hotels and hospitality properties
• Self-storage facilities
• Land and development projects
• Special-purpose properties

Eligibility depends on the property and financing program.

Commercial real estate loan amounts can range significantly depending on the property value, purchase price, borrower qualifications, cash flow, equity contribution, and financing program. Financing may be available for smaller property purchases as well as multimillion-dollar commercial real estate transactions.

Down payment or equity requirements vary based on the financing program, property type, borrower qualifications, loan-to-value ratio, and transaction. The applicable financing provider will determine the required equity contribution.

There is no single credit score requirement for every commercial real estate loan. Financing providers may consider personal and business credit, along with income, cash flow, property value, available equity, existing obligations, and the borrower's ability to repay the financing.

Yes. Eligible businesses may be able to use SBA financing to purchase, construct, renovate, or expand owner-occupied commercial real estate. SBA 7(a) and SBA 504 loans may be relevant depending on the transaction, property, business, and intended use.

The SBA 504 loan program is designed primarily to provide long-term financing for qualifying fixed assets, including owner-occupied commercial real estate, facilities, and major equipment. Eligibility and financing structures are subject to SBA and participating lender requirements.

SBA financing is generally intended to support eligible operating businesses rather than passive real estate investment. Properties financed with SBA loans must satisfy applicable occupancy and program requirements.

Potentially. Owner-occupied commercial real estate financing can help businesses purchase buildings or facilities where they conduct their operations. Conventional and SBA financing options may be available depending on the property and borrower.

Potentially. Conventional commercial real estate financing may be available for income-producing and investment properties. Financing providers may evaluate property income, occupancy, leases, expenses, debt-service coverage, borrower experience, and other factors.

Yes. Commercial real estate refinancing may allow a property owner to replace existing financing with a new commercial real estate loan. Refinancing may be considered to change the repayment structure, access available equity, or address other business financing needs.

Potentially. Some commercial real estate financing programs may include funds for qualifying renovations, improvements, or expansion projects. Requirements depend on the financing program and scope of the project.

Potentially. Commercial construction financing may be available for qualifying new developments, additions, renovations, and other commercial construction projects. Construction financing generally has different underwriting and disbursement requirements than financing an existing property.

Potentially. Financing may be available for land intended for qualifying commercial development. Land financing can have different down payment, underwriting, and development requirements than financing an existing income-producing property.

Requirements vary, but financing providers may request:

• Business and personal financial information
• Business tax returns
• Profit and loss statements
• Balance sheets
• Business bank statements
• Property information
• Purchase agreement
• Existing leases or rent rolls
• Property operating statements
• Appraisal or valuation information
• Information about existing debt

Additional documentation may be required depending on the property and transaction.

An appraisal or other property valuation may be required. The financing provider may use the valuation to evaluate the property's market value and determine the appropriate financing amount.

Loan-to-value (LTV) compares the amount of financing to the value of the commercial property. Financing providers may use LTV as one factor when determining how much they are willing to finance and how much equity the borrower must contribute.

Debt service coverage ratio (DSCR) compares a property's or business's qualifying cash flow with its debt obligations. Financing providers may use DSCR to help evaluate whether sufficient cash flow is available to make the required loan payments.

Commercial real estate loan rates vary depending on the financing program, property, borrower qualifications, loan amount, repayment term, market conditions, and financing provider. Actual rates and terms are determined during the financing process.

Repayment periods vary based on the financing program and property. Certain commercial real estate financing options may provide longer repayment periods because real estate is a long-term asset.

The timeline depends on the financing program, property, transaction size, appraisal, documentation, underwriting requirements, and financing provider. Larger or more complex commercial real estate transactions may require additional due diligence before closing.

A commercial real estate loan is primarily used to finance commercial property. A general business loan may be used for working capital, inventory, equipment, expansion, acquisitions, and other eligible business expenses.

Qualification requirements vary, but financing providers may consider:

• Personal and business credit
• Business financial performance
• Property value
• Property type and condition
• Intended use
• Available equity
• Cash flow
• Debt-service coverage
• Existing obligations
• Borrower experience
• Ability to repay the financing

Start by providing information about your business, the commercial property, purchase price or property value, intended use, and requested financing amount. Your information can then be evaluated to help identify commercial real estate financing options that may fit your property and business needs.