Commercial property loan lenders are back in the market, and they’re closing deals more than ever — up 16% year over year.
Capital is available. But if this is your first time buying a commercial property, you’re competing with plenty of other well-prepared borrowers who probably already know what lenders want to see.
You need to know exactly what your options are — and which one will give you the best chance of approval based on your position — if you want your deal funded.
New to commercial property investing?
Use this table to quickly compare your CRE financing options.
| Bank loans | Standard loans from banks or credit unions typically requiring 20% to 30% down payment and a strong credit history
Competitive interest rates Slower and more paperwork-heavy |
| SBA loans 7(a) & 504 | Government-guaranteed loans for owner-occupied commercial properties
Lower down payments (sometimes as low as 10%) Longer repayment terms |
| Bridge loans | Short-term financing for quickly securing funds while arranging permanent financing
Fast closing |
| Hard money loans | Asset-based loans from private lenders
Focused on property value instead of borrower credit |
| Seller financing | The seller provides the financing directly (you pay them instead of a bank |
| Crowdfunding | Passive
You pool funds with other investors to buy into commercial properties |
Bank loans for commercial properties
Most commercial real estate deals still start at the bank, especially if the property is stable and the borrower fits the mold.
These loans — even though they take months to process — are widely used because interest rates are competitive and repayment terms are long.
But you need a stabilized property and predictable income streams to qualify.
Most banks will only approve borrowers who have strong credit profiles and can provide detailed documentation.
The downpayment requirement is also quite high, usually between 20% and 30%.
Are you W‑2 employed and able to wait 60 days?
This route can make sense. But if your CRE deal is time‑sensitive or outside the box, it’s worth looking at other options.
SBA loans – 7(a) and 504 for commercial properties
Loans backed by the US Small Business Administration are designed specifically for owner-occupied commercial properties — that is, if you yourself will run your business in the commercial building you want to buy.
The down payment required is sometimes as low as 10% (definitely much lower than what banks ask for), and repayment periods can stretch to 25 years.
You can use the 7(a) loan to purchase commercial real estate, refinance debt, boost your working capital, or even buy a business.
The 504 loan is more specific — you can only use it for long-term fixed assets like commercial property, land, or heavy equipment (not for working capital or inventory).
Bridge loans
Bridge loans are, by nature, short-term financing solutions designed to help you buy a property while you’re arranging long-term funding.
It could be the best option if you want to purchase a building right away, even if you haven’t yet sold another property, you own and are counting on that sale to free up cash.
You can also use a bridge loan to finance a multifamily property that doesn’t currently meet the requirements for long-term financing, maybe because it’s vacant or is not yet generating a steady income.
Once you lease it up and get its cash flow started, the property becomes more attractive to traditional banks, making it easier to refinance into a permanent mortgage.
Here at Private Capital Investors, our bridge loans help clients close on time-sensitive CRE properties within days. We are open to funding deals that are still mid-transition. Talk to us if you are interested in getting financing for a vacant/value-add building or a quick flip.
You don’t need perfect credit to get approved.
Hard money loans
Hard money is probably one of the most misunderstood types of CRE financing available.
It’s often dismissed as a last resort for desperate borrowers, but in reality, serious CRE investors who need fast asset-based lending without jumping through hoops use it as a tool to quickly close deals that aren’t eligible for bank financing.
At Private Capital Investors, we fund hard money loans for:
- Properties mid-renovation
- Mixed-use assets with zoning complexity
- Borrowers with irregular income or past credit issues
- Investors making aggressive plays on undervalued properties
We can structure the deal creatively and release funds quickly, so you’re not stuck in limbo while waiting for traditional approvals.
And because we focus on the property and not on your personal tax returns or employment history, you can pursue the deal even if your financials aren’t perfect.
Seller financing
Sometimes, the seller might be willing to carry the note, so you make payments directly to them (skipping the bank entirely).
Seller financing works best in situations where the seller owns the property outright and is open to alternative deal structures.
Be sure to work with experienced legal counsel to structure these agreements properly.
CRE crowdfunding
Not quite ready to handle the risks and responsibilities of buying and managing a commercial property on your own?
Crowdfunding will allow you to dip your toes in the industry.
Instead of buying a building outright, you contribute a smaller amount to a larger deal alongside other investors.
You don’t manage the asset, and you’re not signing for the loan, but you do get a share of the returns if the project performs well.
Want financing? Show you’re ready
A little prep goes a long way, whether you’re applying at a bank or going the private route.
- Check your credit. Most banks want to see 680 or better. Private lenders may be more flexible but will still want to see signs that you can manage debt responsibly. What do you owe? How much room do you have to take on new debt? Lenders will ask, so have the answers.
- Have enough capital for a downpayment. Are your funds tied up elsewhere? Line up liquidity before you apply.
- Show lenders that you have a plan. What are you buying, and why now? What income can you expect, and when do you expect that income to come in?
- Set aside a cushion. IN CRE, vacancies and delays are part of the game. Be ready for them.
Work with a lender who has done this before
Not sure which loan structure fits your deal?
It’s best to work with a direct lender that specializes specifically in CRE, like our team here at Private Capital Investors.
Tell us what you’re working on here, and we’ll help you figure out the next step. You can also call 972-865-6206.
