Commercial Loans

Building Something Real Takes Real Financing

I got into this business because of real estate. I bought my first investment property at 21 and learned the language of financing by living it. Over the years I have worked with business owners, investors, and entrepreneurs who are using property to build something that lasts.

Commercial real estate financing is not one-size-fits-all. It is complex, it moves on deal-specific timelines, and it rewards people who have the right advisor. When a business owner comes to me about a commercial property, I think about their business, their goals, their timeline, and what this property means for their next ten years. If you are ready to take that step, I want to hear about it. And if the deal is not quite ready yet, I will tell you honestly what it will take to get it there.

Types of Commercial Loans

Conventional commercial: Banks and non-bank lenders; $500K–$10M+; 20–35% down; 5–15 year terms, 20–25 year amortization; DSCR 1.20–1.30x; 680+ credit; full recourse typical. Office, retail, industrial, multifamily 5+, mixed-use, self-storage.

SBA 7(a): Up to $5M; as low as 10% down for owner-occupied; up to 25 years; SBA guarantees a portion so lenders offer better terms. Borrower's business must occupy 51%+ of the building. Best for small business owners buying the building they operate from.

SBA 504: Two-loan structure: 50% conventional + 40% SBA CDC + 10% down. Up to $5.5M SBA portion; 10–25 year fixed on SBA portion. Owner-occupied; job creation (1 job per $90K SBA financing). Best for established businesses wanting long-term fixed rate.

DSCR commercial: Qualifies on property NOI vs. debt service; no personal income docs. $500K–$5M+; 25–35% down; 1.20x+ DSCR. Ideal for investors, self-employed, portfolio landlords. Multifamily 5+, mixed-use, retail, office, industrial.

Commercial bridge: 6 months–3 years; 60–75% LTV; 8–12%+; closes in 2–4 weeks. For stabilizing vacant property, auction buys, renovation before permanent financing, time-sensitive acquisitions. Exit strategy required.

Construction: 12–24 months; draws as milestones complete; 65–75% of completed value. Ground-up or major renovation. Plans, permits, contractor bids required.

Multifamily 5+: Fannie/Freddie agency ($750K+), FHA HUD, DSCR. SoCal multifamily is highly active; agency offers best rates for stabilized 5+ unit properties.

How Commercial Loans Are Underwritten

1. NOI (Net Operating Income): Gross income minus vacancy and operating expenses, before debt service. The foundation—higher NOI supports more debt.

2. DSCR: NOI / annual debt service. Below 1.00x usually denial; 1.20–1.24x minimum for most programs; 1.25x+ healthy; 1.35x+ best terms.

3. LTV: Lower LTV means more equity and better terms. Up to 65% LTV best; 65–75% standard; 75–80% SBA/agency; above 80% very limited.

4. Borrower: Credit 680+ (700+ for best terms), global cash flow, net worth, liquidity reserves (6–12 months PITI), commercial experience.

5. Property and market: Commercial appraisal, Phase I environmental, property condition report, rent roll and lease analysis, market vacancy. I help clients review their deal through a lender's lens before we submit.

Commercial Loan Costs and Rates

Costs: origination (0.5–2%), commercial appraisal ($2.5K–$10K+), Phase I environmental ($1.5K–$4K), PCA if required, title/escrow, legal, SBA guarantee fee (7(a)), recording, processing. Prepayment penalties are common (step-down, yield maintenance, defeasance)—understand before signing. Many loans have a balloon at end of term (e.g. 5-year term, 25-year amortization); plan your refinance or exit. Rates vary by program and deal: conventional strong deal 6.5–8.5%; SBA 7(a) variable Prime + spread; SBA 504 fixed competitive; DSCR commercial 7.5–9.5%; bridge 9–13%+; agency multifamily 6–7.5%. I will explain prepayment and rate structure for your scenario.

Is a Commercial Loan Right for You?

Strong fit if: You are a business owner buying the building you operate from; an investor purchasing 5+ units or other income property; buying retail, office, warehouse, or mixed-use; refinancing for better rate or equity; a developer building ground-up; or seeking DSCR-based financing or a bridge loan. Have a clear idea of the property, income/expenses, down payment or equity, and credit 660+ (some programs lower with compensating factors). Business financials needed for SBA. If you are earlier in the process, that consultation is valuable too—I will tell you where you stand and what it would take. I have helped people turn situations that looked stuck. There is usually a way.

Commercial Loan FAQ

Minimum down payment? Conventional 20–30%; SBA 7(a) and 504 as low as 10% for owner-occupied; DSCR 25–35%; bridge varies by LTV. I will find the program that gets you to the table with the least capital while meeting your goals.

Self-employed? Yes. DSCR commercial qualifies on property income, not personal—great for self-employed. SBA requires business and personal docs but is used to evaluating self-employed businesses. I work with self-employed borrowers regularly.

Credit score? Conventional 680+; SBA 650–680 minimum; DSCR commercial some programs 620–650 if property cash flow is strong. I will be honest about where you stand.

How long to close? 45–90 days typical. Conventional straightforward deals 45–60 days; SBA 60–90+; bridge 2–3 weeks. I give you a realistic timeline early.

Mixed-use? Yes. Underwriting considers income from both commercial and residential portions. I will determine the best path.

Balloon payment? Most commercial loans have a balloon—e.g. 5-year term, 25-year amortization; at year 5 the balance is due. You refinance or sell. I make sure you understand your balloon and have a strategy before you close.

Refinance? Yes. Refinancing is common—lower rate, cash-out, pay balloon, or bridge to permanent. Process similar to purchase; bring current loan details and rent roll.

Recourse vs. non-recourse? Recourse = lender can pursue personal assets if default. Most conventional and SBA are full recourse (personal guarantee). Agency multifamily can be non-recourse for qualifying borrowers. I will make sure you understand what you are guaranteeing.

I found a property—what first? Call me. Before you make an offer or talk to a bank, I want to look at the numbers with you, assess your borrowing capacity, and tell you whether the deal makes sense and how we would finance it. Having your financing strategy shaped saves time and can make your offer more competitive.