What is a Commercial Real Estate Loan?
Commercial real estate loans are ideal for businesses looking to either purchase, develop or construct new property as well as current commercial property. The way it works is businesses can apply for this type of financing in order to secure a loan (may also be referred to as mortgage for this specific financing) which itself is secured by liens on the commercial property. As the name states, this is for commercial properties only and not for residential properties. Understanding that this loan is for commercial real estate, the terms and rates may differ from a traditional residential mortgage.
Uses of Commercial Real Estate Loans
The use for this type of financing can vary, meaning, the business does not have to acquire new property in order to apply. This loan can cover expenses such as refinancing, or renovations needed on current business real estate in addition to covering new real estate property. Small business owners or even large corporations may be eligible for this type of loan. Keep in mind, this type of financing is very different to a traditional residential mortgage that you would apply for when purchasing or refinancing a residential property. Aside from different terms and rates (as mentioned above) the requirements and application process vary as well.
Real Estate Financing Details
Qualifying Criteria
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650+ personal credit score for LTVs over 50%
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620+ personal credit score for LTVs 50% or less
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12 months mortage history
Required Items
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Signed one page funding application
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3-5 most recent months company bank statements
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Lease agreement required for subject property on refinance transcations
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Details on the property to be acquired
Types of Real Estate Financing
1. Fix & Flip
2. New Construction
3. Multifamily
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4. Rental
Loans for investors who are buying distressed properties, rehabbing, and selling​.
Loans for builders with shovel-ready lots or teardown projects. Spec houses or model homes, infill, teardown, or subdivisions.
Loans for investors buying distressed multifamily properties that need capital expenditures and rent increases to bring value to current market standards.
Loans for real estate investors looking to rent out single properties or portfolios and refinance or purchase.