Commercial loans typically cover:
Purchasing commercial real estate
Construction or property development
Business expansion or working capital
Equipment, vehicles, or machinery
Renovation or property improvements
Refinancing existing business debt
Often yes. Most lenders require business owners with 20%+ ownership to sign a personal guarantee, especially for SBA and bank loans. Some hard money or non-recourse programs offer exceptions.
DSCR measures a property or business’s ability to cover its debt payments. Most lenders require a DSCR of 1.20+. A higher DSCR means stronger cash flow and better loan approval chances.
A commercial loan is financing used for business purposes, such as buying real estate, expanding operations, purchasing equipment, or improving cash flow. These loans are designed for business entities rather than individual consumers.
Low Rates for Qualified Borrowers
Competitive interest rates are designed to support business cash flow and ROI.
Up to 100% Financing with SBA Programs
Leverage government-backed Small Business Administration (SBA) loans for full financing in select cases.
No Income Documentation Options Available
Ideal for investors or businesses with unconventional income structures.
Financing for All Property Types
From small retail units to large multi-family apartment complexes.
What’s the Difference?
Choosing between a commercial and residential mortgage depends on your goals, property type, and financing needs. Here’s a simplified breakdown to help you understand how they differ:
Borrowers:
Business entities like LLCs, trusts, or partnerships typically take commercial mortgages. In contrast, residential mortgages are designed for individual borrowers looking to purchase or refinance a personal home.
Loan Term:
Commercial loan terms usually range from 5 to 20 years and often come with a longer amortization schedule. Residential mortgages, on the other hand, usually span 15 to 30 years with predictable payment terms.
Down Payment:
Commercial loans often require a larger down payment—typically between 20% to 40% of the property value. Residential mortgages can offer much lower down payments, sometimes as low as 5% for qualified buyers.
Qualification Factors
Commercial mortgage approval is based on factors like the business’s revenue, projected growth, current obligations, and property cash flow. Residential loans primarily focus on the borrower’s income, credit score, and debt-to-income ratio.
Interest Rates
With commercial loans, interest rates may be fixed or variable, and amortization may extend beyond the loan term. Residential mortgages usually have fixed rates tied to the entire loan duration, with regular monthly payments.
