Financing a commercial property is not as cut-and-dried as getting a home mortgage. Many borrowers struggle to find lenders that cater to their evolving business or investment goals in terms of interest rates, lending limits, tenure, or customer service.
We have evaluated the best commercial real estate loans from various angles to help you make an informed decision. You will learn about:
- Top commercial real estate (CRE) lenders in the traditional scene
- Pros and cons of the best picks
- Alternative (non-traditional) options for flexible commercial borrowing
Best Commercial Property Loans—What To Look For
Commercial property is used to facilitate business or general income, so the financing solutions differ from mortgage products like FHA or home equity loans targeted toward self-occupied homes. In general, there are four commercial real estate loan types:
- Regular commercial bank loans—These are typical business loans by national and local banks offered to individuals/entities with high credit scores. The lenders charge competitive interest rates (4%–20%) and have a repayment schedule of 1–10 years
- Small Business Administration (SBA) loans—SBA-guaranteed loans have low interest rates (6%–13%) and long repayment tenures (up to 25 years). They are open to businesses with bad credit
- Bridge loans—Real estate bridge loans are temporary financial instruments that help you finance a property until you get a long-term bank loan
- Hard money loans—These loans are strictly asset-based products that require the purchased real estate to act as collateral. Unlike banks and traditional lenders, hard money lenders do not over-scrutinize a borrower’s soft assets, such as their credit score or debt-to-equity (D/E) ratio, so the processing is fast and hassle-free
The first two options can be acquired via traditional lending routes, while bridge and hard money loans are considered alternative products.
Best Banks and Other Traditional Lenders for Commercial Real Estate Loans
After careful analysis, we made a list of seven top lenders for commercial real estate loans (in no particular order) that shine in a certain aspect. Refer to the table below for an overview, followed by detailed reviews right after:
|Online AI-powered borrowing experience
|Extensive in-person borrowing experience
|Fast turnaround time
|Real estate loans for startups
|Growing, mid-market, or niche businesses
|Bank of America
|Unsecured (collateral-free) commercial loans
#1 SmartBiz Loans
SmartBiz Loans is an AI-enabled intuitive, marketplace-like platform that connects you to a network of vetted banks and lending companies offering SBA loans (up to $5,000,000) and term loans (up to $500,000) for commercial properties. You can also apply for an owner-occupied commercial real estate mortgage or refinance, which is a boon for small business owners.
You need to have a minimum credit score of 650 and a business running for at least two years to qualify, although some lenders in the company’s network may consider newer organizations. The pricing structure is a bit vague, but you roughly pay around $3,000–$5,500 in various fees.
The platform is well-reviewed by people looking for an effortless online borrowing experience. A potential drawback can be that customers are asked to offer a business lien or personal guarantee, which is quite risky, especially for unstable businesses.
Here are some pros and cons of SmartBiz Loans:
|• Online prequalification and application
• Competitive rates (presented by a network of partner lenders)
• Owner-occupied options
|• Business/personal guarantee required
• Stringent qualification terms
#2 JPMorgan Chase
If you prefer in-person borrowing assistance, JPMorgan Chase is a convenient choice. The bank needs no introduction—it’s reputable and offers commercial term lending for commercial and mixed-use properties, with special packages for developers, nonprofits, and community development organizations.
You can apply for a JPMorgan Chase CRE loan by visiting any of the lender’s branch locations available across 48 U.S. states. Depending on the commercial property, you can get a loan of up to $15 million, although multi-family projects can qualify for more. The bank does not have a minimum running time for businesses. The closing fee is between 1% and 5% of the amount borrowed.
You’re competing with numerous applicants when you go for JP Morgan Chase loans, and due to the in-person processing, it can take a while for your request to be reviewed.
The following table summarizes the commercial loan experience at JPMorgan Chase:
|• Highly reputable lender
• In-person handling
• Options for mixed-use properties
|• High volume of applicants
#3 PNC Bank
Pittsburgh-based PNC Bank operates in 28 U.S. states and the District of Columbia. It is one of the largest SBA lenders in the country. Depending on the project or industry, you can secure up to $5,000,000 in SBA-guaranteed funds. PNC Bank typically does not charge prepayment penalties if the loan term is less than 15 years.
Besides SBA loans, PNC Bank also services regular real estate loans at fixed and variable rates. The minimum in-business time is three years. You can borrow up to $3,000,000—you’ll get a monthly repayment schedule, with the installments being automatically deducted from your business checking account.
You can apply for PNC loans online, but the website offers no transparency about minimum credit scores or applicable interest rates. Here’s a snapshot of its pros and cons:
|• Quality SBA lending products
• Significant loan sizes
• Fixed and variable rates available
|• Limited rate and fees transparency
• New businesses (under three years) aren’t eligible
Lendio, like SmartBiz Loans, is an online marketplace of about 75 business-friendly lenders. The platform makes it easy to compare the amounts, rates, and terms offered by the lenders within the ecosystem.
Most traditional lenders take about 50–90 days to process real estate loan applications, but Lendio’s competitive network can hook you up with the funds within a week. Keep in mind that speedy delivery of loans is usually offered at the cost of higher interest rates.
You typically need a credit score of 680 to qualify for Lendio CRE loans. Startups can also qualify, but the lending limit is only up to $100,000. You can expect a string of fees for loans funded through the platform, including processing, underwriting, funding, legal, guarantee, and closing charges.
Source: Kelly Sikkema
Take a glance at Lendio’s pros and cons below:
|• Multiple lenders available
• Easy product comparison
• High-speed funding
|• Strict qualification requirements
• Can be pricey
Fundera is a loan brokerage platform that focuses specifically on startups and small businesses. The platform’s vetted lenders offer SBA, business mortgage, rehab, and renovation loans for amounts ranging from $50,000 to $1,000,000.
You have to fill out an online questionnaire to find suitable lenders at Fundera. In most cases, you have to wait for a lender to contact you with quotes. While the minimum credit scores and other requirements vary from lender to lender, you’re likely to qualify only if you have robust financial projections.
The downside of using Fundera is that your info is available to multiple lenders. Many customers complain about receiving incessant calls from lender representatives throughout the day. Check out the pros and cons of the platform:
• Multiple lender options
• Wide variety of CRE products
|• No streamlined application process
• Frequent calls
#6 Byline Bank
Byline Bank offers a wide range of commercial products, including SBA and conventional real estate loans and commercial construction loans. The lender operates through multiple brick-and-mortar locations across Chicago and Milwaukee metro areas.
Byline Bank isn’t transparent about qualification requirements and rates online but can offer up to 90% financing, which is beneficial for growth opportunities. It also provides customized loans based on the niche market you’re operating in. You need to complete an online form to talk to Byline Bank representatives—reviews suggest they provide fantastic customer service.
The following table recapitulates the commercial lending services of Byline Bank:
|• Multiple product options
• Customized loan programs
• Good customer service
|• Limited service areas
• No rate/fees transparency
#7 Bank of America
Bank of America offers multipurpose CRE loans. You can buy, get a refinance, or use your existing equity for commercial loans starting from $25,000. The website specifies two major qualification requirements:
- $250,000 or more in annual revenue
- At least two years in business under existing ownership
The bank provides the option of choosing balloon payments—essentially, you have to make interest-only payments every month and repay the principal at the end of the tenure as a one-time lump sum. Bank of America also finances unsecured loans up to $100,000 for borrowers who don’t want to use collateral (or if the property they’re purchasing is ineligible).
You need to schedule an appointment with Bank of America officers via phone to discuss your options. In most cases, you will be asked to give a personal guarantee to qualify. Let’s go over the bank’s pros and cons:
|• Multiple CRE products
• Unsecured loans available
• In-person servicing
|• Personal guarantee required
• Strict eligibility requirements
Top Alternative Solutions for Commercial Property Loans
Alternative borrowing solutions have become popular in the past decade because of the limitations of traditional commercial lending, which include:
- Inflexible credit score requirements
- Slow and tedious processing (which is often impractical for real estate deals)
- High rejection rate
- Submission and resubmission of paperwork
Bridge loans and hard money loans make more sense in situations where you need quick access to funding with minimal paperwork. They are both short-term products—while bridge loans are only used for interim financing, hard money loans have versatile uses in the real estate market.
Hard Money Loans for Commercial Real Estate
Hard money lenders are state-regulated financiers that work much like banks in terms of collateralizing real estate purchases. Say you’re buying a $300,000 retail property—the lender will offer you up to 70% loan-to-value (LTV) and keep the title deeds of the property until you settle the amount at maturity. In case you default, the lender sells the property to recover the money, so it’s a 100% secure investment for the lender.
Source: Robert Stump
Hard money loans outperform regular loans because they don’t require the borrower to prove they are financially sound. You can have a low credit score or less-than-standard business experience and still qualify if the collateral works.
Hard money lenders operate in a time-sensitive manner and usually release the funds within days, but it’s hard to compare them because they don’t offer standardized services. Go for lenders with:
- Consistently good reviews
- Transparent rates and fees
- Responsive approach
- Adequate diligence practices (like property appraisal)
Hard Money Loan Solutions Offers the Best Loan for Commercial Property—Here’s Why
If you’re tired of the outdated, time-sapping approach of traditional lenders, finance your commercial real estate loan at Hard Money Loan Solutions (HMLS). The lender offers bridge loans, hard money loans, business loans, and consumer-purpose real estate loans. You can finance (or refinance) all types of properties, including:
- Residential homes (single- or multi-unit)
- Retail or office buildings
- Commercial or residential land
- Rental units
- Mixed-use property
You can also choose an investment, cash-out refinance, construction, rehab, or fix-and-flip loan if you want packages that align perfectly with your intent. The group offers short sale and bank foreclosure loan options as well. HMLS carries out a stringent property appraisal to verify if the deal would be mutually beneficial but doesn’t ask for personal details like:
- Credit report
- Employment proof
- Residency proof
- Bank statements
- Income docs
- Tax returns
- Income verification
The group also doesn’t charge junk fees, such as upfront, inspection, processing, underwriting, and digital retention fees, that can usually go over $8,000.
HMLS has headquarters in Florida and is managed by a group of experienced entrepreneurs and investors who know how to ride the waves of the real estate market. Over the years, they have funded numerous real estate projects—including complicated ones. You can browse through some of their recently funded properties here. HMLS has a 5-star service rating on Google due to its efficient servicing timeline and customer-focused approach.
Source: Google Reviews
Contact the group for a free consultancy and get creative funding solutions customized to your needs!
How To Qualify for an HMLS CRE Loan and What Terms To Expect
HMLS commercial real estate loans are tailored to your situation. The team typically looks at the health of the property and the borrower’s equity investment in it. Anyone with a decent deal is approved, but applicants with a history of bankruptcies or multiple startup failures may be rejected.
The HMLS group can back up large investments (up to $50 million) at competitive interest rates in 3–14 days. The team doesn’t ask for down payments, allowing borrowers to handle property purchases by themselves. Here are the typical terms you can expect:
|9.99%–12% (determined according to the LTV ratio)
|Interest rate type
|Fixed (interest-only payments)
|Up to 70% of the current purchase price or appraised asset value (whichever is lower)
|2 points or 2%
|3 days to 2 weeks
Apply for an HMLS loan and enjoy the best lending practices, including:
- Complete transparency
- Swift and clear communication
- Strong funding commitment (no last-minute denials)
- Light paperwork
- No prepayment penalty after six months
- Responsive team
HMLS offers interest-only mortgages. Your monthly payments are low throughout the tenure, so you don’t have to deal with negative equity. Repay the loan at maturity when you sell or make a profit out of the commercial property.
Source: Austin Distel
Loan Application Process at HMLS
You have to complete a short application form online to reach out to HMLS. The team reviews your application and calls you over the phone to discuss the loan. Here’s how the loan shapes up:
- Go to the HMLS loan application page
- State your contact info and commercial property details
- Specify a rough loan amount
- Add any specific details (if necessary) before applying
- Talk to the lender when they call
Once HMLS approves your loan, you can review the package emailed to you and confirm or reject the offer. If you confirm, the group will contact their legal partners to set up the loan documents and transfer the funds to your account.
Featured image source: Karolina Grabowska