Commercial real estate
Commercial Real Estate
Commercial property financing is structured around the real estate, tenant income, borrower and business plan. A stabilized leased asset, an owner-user building and a vacant property can need very different loan structures.
Who it fits
Income-producing commercial properties and business-occupied real estate with documented repayment capacity.
Work through the numbers
A practical example
Illustration: a building produces $180,000 of underwritten NOI. A proposed $150,000 annual debt payment gives 1.20x DSCR; a $135,000 payment gives about 1.33x. The stronger coverage comes from a smaller payment, not a change in property value.
What to have ready
- Rent roll, leases, trailing income and expenses
- Property details, condition and capital expenditure plan
- Sponsor financials and existing debt schedule
Questions, answered.
Start with the financing mechanics, then look at the details that can change your actual terms.
Should I use a bank loan or private financing?
Compare the asset’s readiness, cash flow, closing deadline and planned hold. Bank or permanent debt may fit a stabilized property, while a transitional asset may need a private bridge. Ask each lender to explain proceeds, covenants and the path to closing.
How does tenant quality affect the loan?
Lenders look at rent collections, lease duration, rollover dates, tenant concentration and the cost of re-leasing space. A high contractual rent does not eliminate the risk of a major tenant leaving near loan maturity.
Can the term be shorter than amortization?
Yes. A commercial loan may calculate payments over a long amortization schedule while the remaining balance becomes due at an earlier maturity. That balloon creates a future refinance or payoff need. Check both dates on the term sheet.
Can I finance a building my business occupies?
Potentially. Conventional owner-user financing and SBA programs may be relevant. The lender will assess the operating business as well as the property. SBA eligibility and occupancy tests must be confirmed for the specific transaction.
Which third-party costs should I expect?
Possible costs include appraisal, environmental assessment, property-condition review, legal, title and survey work. Requirements vary by lender and property. Ask which reports must be ordered, whether existing reports are acceptable and when deposits become non-refundable.
What should I send CommFi to evaluate my scenario?
Start with the property or equipment details, transaction amount, intended use and timing. Include the documents listed above when available. CommFi can then assess the financing route and request scenario-specific terms. A pre-qualification is preliminary; appraisal, documentation and final lender approval can change the result.
Go a little deeper
Headline terms are illustrative best-case program features for qualified scenarios, not a loan offer or a confirmed CommFi lender commitment. Availability, proceeds and pricing depend on the lender, borrower, collateral and final underwriting. Maximum leverage, lowest pricing and fastest closing may not be available together.