Expect to put 10% to 30% down. CRE lenders rarely finance 100% of a purchase, with SBA 504 loans at the low end and conventional bank loans often at 20% to 25%.
Check the owner-occupancy rules before applying. SBA-backed loans generally require your business to use at least 51% of the space, while investment property loans suit space you’ll lease out.
Watch for balloon payments. Some loans carry a term shorter than the amortization period, leaving a large payment due before the loan is actually paid off.
This summary was generated by AI and may contain errors or omissions.
If you’re ready to stop renting and buy the building your business runs out of, or you want to add an income-producing property to your portfolio, a commercial real estate (CRE) loan lets you spread a large purchase over years instead of writing one enormous check. Because CRE loans involve large amounts and long terms, even a small difference in rate or down payment can be worth thousands across the life of the loan, which makes shopping around especially important.
We looked at loan amount ranges, rates, terms and eligibility requirements published directly on each lender’s own website, prioritizing lenders that offer real flexibility for different property types, credit profiles and business structures. We included both direct SBA specialists and marketplaces so you can compare a hands-on banking relationship against the speed of matching with multiple lenders at once.
How to compare commercial real estate business loans
Rates and down payments can swing your total cost by tens of thousands of dollars across a 25-year term, so don’t stop at the first offer.
Interest rate. Check whether it’s fixed or variable, since a variable rate can climb across a 10–25 year term.
Down payment. CRE loans rarely finance 100% of a purchase, so confirm how much cash you’ll need up front.
Term versus amortization. Some loans carry a balloon payment due before the amortization period actually ends.
Owner-occupancy rules. Some loans require your business to occupy the majority of the space to qualify.
Fees and closing costs. Origination fees and closing costs can run several percent of the loan amount.
Funding speed. Confirm turnaround time if you’re under contract with a closing deadline.
What is a commercial real estate business loan?
A commercial real estate loan, also called a commercial mortgage, finances the purchase, refinance or renovation of business property like offices, retail space or warehouses. The property secures the loan, but commercial terms run shorter than home mortgages, typically five to 25 years, and lenders usually cap financing at 70% to 80% of the property’s value.
Some CRE loans are “owner-occupied,” requiring your business to use most of the space, while others suit investment properties you plan to lease out. SBA-backed 504 and 7(a) loans are popular for lower down payments and longer terms, though they generally require owner-occupancy.
Pros and cons of commercial real estate business loans
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Not every CRE loan works the same way. Here’s how the main types stack up.
Type
Typical loan amounts
Typical term lengths
Best for
Conventional commercial mortgage
$250,000–$5 million+
5–25 years
Established businesses with strong credit and a down payment ready
SBA 504 loan
Up to $5.5 million
Up to 25 years
Owner-occupied purchases needing a low down payment
SBA 7(a) loan
Up to $5 million
Up to 25 years for real estate
Businesses that also need working capital bundled into the purchase
Bridge loan
Varies by lender
Months to 2–3 years
Covering a gap before long-term financing is in place
Commercial construction loan
Varies by lender
Converts to permanent financing after completion
Building a new facility rather than buying an existing one
How to qualify for a commercial real estate business loan
Requirements vary by lender and loan type, but most CRE lenders look for a similar core set of qualifications before they’ll approve a purchase.
Credit score. Bank financing typically wants 650–700+, though some marketplaces accept scores as low as 500.
Time in business. Most lenders want at least one to two years, sometimes longer for the best rates.
Down payment. Expect to put down 10% to 30% of the purchase price.
Cash flow. Your business finances need to show enough income to cover the new payment.
Property appraisal. Lenders order one to confirm the property’s value supports the loan amount.
How to apply for a commercial real estate business loan
Gather your documents. Most lenders want two to three years of business and personal tax returns, financial statements, a business debt schedule and details on the property you want to buy.
Get pre-qualified. Many lenders, including marketplaces like Lendio and 1West, offer a soft-pull pre-qualification so you know your likely rate range before you commit to a full application.
Submit a full application and property appraisal. The lender will order an appraisal to confirm the property’s value supports the loan amount you’re requesting.
Review and accept your offer. Compare the rate, term, down payment and any fees before signing.
Close on the loan. Closing can take anywhere from a few weeks with an online marketplace to two or three months with a bank or SBA loan.
Alternatives to a commercial real estate business loan
SBA microloans. Smaller loans up to $50,000, better suited to equipment or working capital than a property purchase.
Business line of credit. Flexible, revolving access to cash if you need working capital rather than a property purchase.
Equipment financing.Equipment financing may be better fit if what you actually need is machinery or fixtures rather than the building itself.
Commercial bridge loan. Short-term financing to cover a gap while you arrange permanent financing or sell another asset.
CDFI or community bank loan. Community development financial institutions sometimes offer more flexible underwriting for small or newer businesses than large banks.
Seller financing. Negotiate directly with the property seller to carry some or all of the financing, which can work when traditional lenders are a difficult fit.
Frequently asked questions
It's possible but harder. Marketplaces like 1West list a 500 minimum FICO score, while most banks want to see 650 or higher. Expect a higher rate or a larger down payment to offset lower credit.
Not always. Owner-occupied loans, including SBA 504, generally require your business to use at least 51% of the space. Investment property loans, offered by lenders like U.S. Bank, suit properties you plan to lease out instead.
Most lenders require 10% to 30% down, with SBA 504 loans on the lower end at around 10% and conventional bank loans often landing at 20% to 25%.
SBA loans typically offer lower down payments and longer terms, but they take longer to close and usually require the business to occupy the property. A conventional mortgage can close faster and works for investment properties, but often needs a bigger down payment.
Megan B. Shepherd is a personal finance expert and editor for loans and insurance at Finder.
Her personal finance expertise has been featured on Forbes, Nasdaq, MediaFeed, Fox News, Time, Reviews.com, and carinsurance.com, adding invaluable information related to personal loans, financial strategies and smart borrowing tactics.
Megan graduated from the University of Texas at Dallas with a BS in Business Administration with an entrepreneurial focus. She's worked as a certified financial adviser and has earned certificates of completion from A.D. Banker & Company.
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