A commercial real estate loan is any type of financing used specifically for properties that generate income. Financing the purchase, renovation, or construction of a commercial property can be much different and more complex than financing a traditional primary residence.
To help you find the right option for your business, we’ve done detailed research and chosen six of the best commercial real estate loans offered by banks and online lenders:
- Lendio: Best overall for multiple commercial loan options
- Lima One Capital: Best for short-term loans
- Kiavi: Best quick and easy funding
- U.S. Bank: Best owner-occupied loan options
- Bank of America: Best for rewards and discounts
- RCN Capital: Best for experienced investors
Overview of the best commercial real estate loans
| Types of loans | Terms | |
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| Loan amounts: $50,000-$5 million Interest rates: Between 4.5%-13% Loan terms: 5-20 years |
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| Loan amounts: $75,000-$5 million Interest rates: Between 8.45%-10.2% Loan terms: 13-24 month terms |
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| Loan amounts: $100,000-$10 million Interest rates: Between 6.75%-9.45% depending on loan type Loan terms: 12 months-30 years |
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| Loan amounts: $5,000-$12 million Interest rates: Variable and fixed-rate options Loan terms: 5-25 years |
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| Loan amounts: $25,000-$5 million Interest rates: Starting at 6.25% Loan terms: 10-25 years |
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| Loan amounts: $50,000-$3 million Interest rates: Starting at 9.2% Loan terms: 12 months-10 years |
Lendio: Best overall for multiple commercial loan options
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Why we chose Lendio
Lendio is an online marketplace that connects with over 75 different lenders. Plus, with its simple, streamlined application process, you can easily apply and find the best commercial real estate loans in about 15 minutes. Out of all the commercial lenders on our list, Lendio offers the largest variety of commercial loan types, making it the best choice for those who want options.
Lendio’s real estate loans and terms
| Type of Lendio commercial loan | Terms |
|---|---|
| Conventional commercial mortgage | Loan amount: $250,000-$5 million Interest rates: As low as 4.5% Loan terms: 10-25 years Time to funding: 4-8 weeks Minimum credit score: 650 Business requirements: Must be in business for at least 2 years |
| SBA 504 loans | Loan amount: Up to $5 million Interest rates: Starting at 4.63% for a 10-year term, 4.51% for a 20-year term Loan terms: 10-20 years Time to funding: 1-2 months after approval Minimum credit score: 650 Must meet SBA loan qualifications (2 years in business and $8,000 in monthly revenue) |
| SBA 7(a) loans | Loan amount: Up to $5 million Interest rates: Variable rates range from 5.75%-8.25%, fixed rates range between 8.5%-11.5% Loan terms: 5-10 years Time to funding: 1-2 months after approval Minimum credit score: 650 Must meet SBA loan qualifications (2 years in business and $8,000 in monthly revenue) |
| SBA microloans | Loan amount: Up to $50,000 Interest rates: Ranges from 8%-13% Loan terms: Up to 7 years Minimum credit score: 620 |
Lima One Capital: Best for short-term loan options
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Why we chose Lima One Capital
Lima One Capital is a real estate lender with a variety of loan options for residential and commercial real estate investors. The variety of loans can fit many different types of commercial projects and needs. In fact, we named Lima One as one of the best providers for fix and flip loans.
Lima One Capital offers high loan amounts, fast funding, and high loan-to-cost and loan-to-value ratios. Plus, almost all of their loans have flexible terms between 13-24 months, which makes this the best commercial property loans for short-term loans.
Lima One Capital’s real estate loans and terms
| Type of Lima One Capital commercial loans | Terms |
|---|---|
| Fix and flip loan | Loan amount: $100,000-$5 million Interest rates: Starting at 8.45% Loan terms: 13, 19, and 24 month options Minimum credit score: Not stated, 600 recommended Maximum LTV: Up to 92.5% LTC and 75% LTV |
| Bridge loans | Loan amount: $100,000-$5 million Loan terms: 13-19 month terms Maximum LTV: Up to 85% Cashout options available No prepayment penalty |
| New construction | Loan amount: $100,000-$5 million Interest rates: As low as 10.2% Loan terms: 19 and 24-month loan terms Time to funding: As little as four days Minimum credit score: Business requirements: Must be in business for at least 2 years 1-4 unit properties Maximum LTV: Up to 90% LTC and 70% LTARV Cashout refinance options available |
| Rental portfolio loan | Loan amount: $75,000-$2.5 million Interest rates: As low as 6.5% Loan terms: 5, 10, or thirty-year options $100,000 minimum value for each property Maximum LTV: Up to 80% LTV on purchase, up to 75% on rate/term refinance and cash out |
Kiavi: Best for quick and easy funding
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Why we chose Kiavi
Kiavi is an online real estate lender that offers a variety of loan options. Since it operates online, it has a streamlined application process that allows you to get funding from most of its loans in as little as one week. Kiavi is also one of the only commercial real estate loan providers with no application fees, no income verification on most loans, and no prepayment penalties. Kiavi even has a “jumbo loan” option that finances up to $10 million and covers up to 95% of the purchase price. Overall, it offers the most user-friendly commercial real estate investment property loans with the fastest funding.
Kiavi’s real estate loans and terms
| Type of Kiavi commercial loans | Terms |
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| Jumbo loans | Loan amount: $3 million-$10 million Interest rates: As low as 8.25% Loan terms: 12, 18, 24 month terms Time to funding: As little as seven days Maximum LTV: Up to 90% LTC and 75% of ARV Property types: Single-family homes and multifamily properties with 5-20 units New purchase, refinance, and seasoned finance options |
| Fix and flip loans | Loan amount: $100,000-$3 million Interest rates: As little as 7.75% Loan terms: 12, 18, and 24-month terms Time to funding: As little as seven days Maximum LTV: Up to 95% LTC / 80% ARV Property Types: Single-family residences, manufactured homes, 2-4 unit dwellings, condos, and PUDs |
| Bridge loans | Loan amount: $100,000-$3 million Interest rates: As low as 7.75% Loan terms: 12, 18, and 24-month terms Interest-only options Time to funding: As little as seven days Maximum LTV: Up to 95% LTC / 80% ARV Property type: Single-family residences, manufactured homes, 2-4 units, condos, and PUDs |
| New construction | Loan amount: $150,000-$3 million Interest rates: As low as 9.45% Loan terms: 24-month terms with extension options Maximum LTV: Up to 85% LTC, 70% ARV Property type: Single-family residences, 2-4 plexes, and PUDs |
| DSCR rental | Interest rates: As low as 6.75% Loan terms: 30-year fixed rates Interest-only options 5/1 and 7/1 ARMs Maximum LTV: Up to 80% LTV Property type: Single-family rentals (SFR), manufactured homes, PUDs, 2-4 units, and condos |
| Rental portfolio loans | Loan amount: Starting at $500,000 Interest rates: As low as 6.75% Loan terms: 10 and 30 year options Interest only options Maximum LTV: Up to 80% LTV Property type: For portfolios with five or more properties |
U.S. Bank: Best owner-occupied options
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Why we chose U.S. Bank
U.S. Bank is one of the best banks for commercial real estate loans because of its variety of loan options. It offers SBA loan options and commercial loans for owner-occupied and non-owner-occupied properties. However, there is no online application process and limited details about loan terms and eligibility. You have to visit a branch of U.S. Bank in person to get more details — although that means you also get personalized guidance throughout the process.
U.S. Bank’s real estate loans and terms
| Type of U.S. Bank commercial loans | Terms |
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| Owner-occupied commercial real estate loans | Loan amount: Business loans from $5,000-$12 million Interest rates: Variable and fixed-rate options Loan terms: 5, 10, and 15 year terms, or up to 25-year amortization Business requirements: Must be in business for at least 2 years Maximum LTV: Up to 80% LTV |
| Non-owner-occupied commercial real estate loans | Loan terms: 5, 10, and 15 year terms, or up to 25-year amortization No lump sum payment at the end of loan period |
Bank of America: Best for rewards and discounts
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Why we chose Bank of America
Similar to U.S. Bank, Bank of America offers SBA loan options and commercial real estate loans or mortgages. However, Bank of America stands out because of its reward options. It offers benefits for veterans, like a 25% discount on loan origination fees — plus, Preferred Rewards members get interest rate discounts up to 0.5%.
Bank of America’s real estate loans and terms
| Type of Bank of America commercial loans | Terms |
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| Traditional commercial real estate loan | Loan amount: Starting at $25,000 Interest rates: Starting at 6.25% Loan terms: Up to 10 years with balloon payment or fifteen years with full amortization Business requirements: Must be in business for at least 2 years and have $250,000 in annual revenue |
| SBA loans (SBA 504, SBA 7(a), and SBA Express) | Loan amount: From $25,000-$5 million Loan terms: Fixed rate terms up to 25 years, variable rate options Must meet SBA loan qualifications Part of the Preferred Lenders Program |
RCN Capital: Best for experienced investors
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Why we chose RCN Capital
RCN Capital is an online lender that offers real estate loans in every state. Like Kiavi, it doesn’t have a traditional commercial mortgage loan, but it does have multiple loan options that can fit the needs of commercial real estate investors.
RCN Capital stands out as one of the best commercial real estate lenders because of its financing options. Not only does it offer multiple types of loans, but it also gives you the ability to use loans to make a purchase, refinance, or cash out. It also offers increasingly competitive rates for investors who have completed more deals. This makes it an ideal option for experienced investors who want a huge variety of financing options.
RCN Capital’s real estate loans and terms
| Type of RCN Capital commercial loans | Terms |
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| Multifamily | Loan amount: $250,000-$3 million Loan terms: 12 months to 30 years, with amortization options Minimum credit score: 650 to 680 Collateral: Multi-family apartments with five or more units, mixed-use properties Purchase, refinance, and cash-out options Maximum LTV: Up to 70% of the as-is value |
| Fix and flip | Loan amount: $50,000-$3 million Interest rates: As low as 9.2% Loan terms: 12-18 months Minimum credit score: 650 Business requirements: Interest rates vary based on number of flips completed Maximum LTV: Up to 95% of purchase price Collateral: Non-owner-occupied multifamily properties with one to four units, condos, townhomes, apartments with five or more units, mixed-use properties |
| New construction | Loan amount: $100,000-$2 million Interest rates: Starting at 9.99% Loan terms: 12-24 months Minimum credit score: 650 Business requirements: Must be in business for at least 2 years Collateral: Non-owner-occupied single-family homes, condos, townhomes Minimum property value of $150,000 LTV and LTC options based on business history |
| Investor rental portfolio | Loan amount: Up to $1.5 million per property and $20 million for the portfolio Loan terms: 3, 5, 7, and 10-year options Minimum credit score: 680 Business requirements: Must be in business for at least 2 years Collateral: Non-owner occupied multifamilies with one to four units, condos, townhomes, apartments with five to nine units |
| Type of RCN Capital commercial loans | Terms |
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| Multifamily | Loan amount: $250,000-$3 million Loan terms: 12 months to 30 years, with amortization options Minimum credit score: 650 to 680 Collateral: Multi-family apartments with five or more units, mixed-use properties Purchase, refinance, and cash-out options Maximum LTV: Up to 70% of the as-is value |
| Fix and flip | Loan amount: $50,000-$3 million Interest rates: As low as 9.2% Loan terms: 12-18 months Minimum credit score: 650 Business requirements: Interest rates vary based on number of flips completed Maximum LTV: Up to 95% of purchase price Collateral: Non-owner-occupied multifamily properties with one to four units, condos, townhomes, apartments with five or more units, mixed-use properties |
| New construction | Loan amount: $100,000-$2 million Interest rates: Starting at 9.99% Loan terms: 12-24 months Minimum credit score: 650 Business requirements: Must be in business for at least 2 years Collateral: Non-owner-occupied single-family homes, condos, townhomes Minimum property value of $150,000 LTV and LTC options based on business history |
| Investor rental portfolio | Loan amount: Up to $1.5 million per property and $20 million for the portfolio Loan terms: 3, 5, 7, and 10-year options Minimum credit score: 680 Business requirements: Must be in business for at least 2 years Collateral: Non-owner occupied multifamilies with one to four units, condos, townhomes, apartments with five to nine units |
How to choose the best commercial real estate loan
The way you finance your real estate business can make or break your success. To make a wise financial decision, you absolutely must start with a strong understanding of your options and what your business needs. Here are a few basic considerations to keep in mind when searching for the best commercial property loans:
- Consider the types of commercial financing: There isn’t one single type of commercial real estate loan that fits the needs of all commercial real estate owners and inventors. Make sure you look at our quick guide below to understand the different types of commercial business financing.
- Consider your business needs: With an understanding of your financing options, make sure to thoroughly evaluate what your business needs. Do you need short-term financing for a renovation, or long-term financing to hold a property?
- Compare loan criteria: Look at the eligibility requirements and terms of each possible loan option. Talk to an expert to determine what you qualify for, and make sure you can comfortably afford the cost of the loan.
Types of commercial real estate loans
The most common types of commercial loans for real estate are:
- SBA Loans (SBA 504 and SBA 7(a)): A government-backed loan program with different types of loans and rates. These are often easier to qualify for than traditional bank loans and have lower interest rates than private lenders.
- Conventional bank loans: These loans generally have stricter requirements, but offer competitive terms and interest rates.
- Commercial construction loan: Construction loans are typically made for builders and developers and generally have short-term payments.
Methodology: How we evaluated the best commercial real estate loans
Our methodology at The Close is to provide real estate business owners with the most accurate and detailed information to help them make smart decisions. To help you find the best commercial real estate loan, our team of researchers, writers, real estate agents, and investors have done detailed research. Our criteria include:
- Loan terms: We looked for commercial real estate lenders who offered a variety of loan terms with competitive interest rates, short and long-term payment structures, and transparent fees.
- Eligibility: Getting a commercial real estate loan can be much more difficult than qualifying for a regular mortgage, so we considered loan options with reasonable criteria for new and experienced investors.
- Availability: We prioritized commercial real estate lenders that offer loans all over the U.S.
- Customer reviews: We chose lenders that have strong reputations and excellent reviews on third-party websites.
Alternatives to commercial real estate loans
If you’re in need of a commercial real estate loan but don’t qualify for a traditional bank or government loan, there are still other options. Here are some alternative types of financing for commercial real estate:
- Blanket loans: Blanket loans finance more than one property at a time but offer a single payment, which is ideal for real estate investors.
- Business loans: General business loans don’t have specific real estate requirements and can be easier to qualify for. However, they may have shorter terms and higher interest rates.
- Partnerships: Working with another real estate investor can help you pool resources and qualify for more loan options.
Frequently asked questions (FAQs)
Which bank is best for a commercial loan?
We chose two banks with great commercial loan options; U.S. Bank and Bank of America. Both banks offer a variety of loan options and a dedicated loan specialist. However, there are also many great non-bank alternatives.
What is a good interest rate on a commercial loan?
A good interest rate for a CRE loan can vary based on the loan type, lender’s preferences, and your creditworthiness as a borrower. Generally, you can expect to see rates anywhere from 6 to 20%+.
Do you have to put 20% down on commercial property?
Putting 20% down on a commercial property is the industry standard. However, there are many exceptions. For example, Kiavi offers many loan options that cover up to 95% of the purchase price.
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