The best commercial real estate (CRE) loans will offer financing for commercial properties at low rates with flexible repayment terms. Common types of commercial properties include apartments, multifamily homes, retail stores, and office buildings.
Since the best loan will vary depending on your qualifications and other circumstances, we’ve selected lenders with different types of loans and flexible qualification requirements for things like credit scores and time in business.
Here are our picks for the eight best commercial real estate lenders:
- Lendio: Best overall for multiple loan options
- U.S. Bank: Best for long-term CRE or Small Business Administration (SBA) loans
- SBG Funding: Best for large SBA 7(a) loan amounts
- RCN Capital: Best for low monthly payments, long repayment terms, and low rates
- SMB Compass: Best SBA 504 loans for major fixed assets
- JPMorgan Chase: Best for multifamily apartment financing and flexible loan terms
- 1West: Best for low credit scores
- Lima One Capital: Best for distressed properties
Best Commercial Real Estate Loans At a Glance
Lendio: Best Overall for Multiple Loan Options
Rates & Terms | |
Starting Interest Rate |
|
Loan Amount | Up to $5 million |
Loan Term |
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Maximum Loan-to-Value (LTV) Ratio | 90% |
Estimated Closing Costs and Fees | Varies based on the loan program |
Time to Fund |
|
Qualifications | |
Credit Score |
|
Time in Business | 2 years |
Annual Revenue | $96,000 annually for SBA loans |
Debt Service Coverage Ratio (DSCR) | 1.25x recommended |
Why We Like Lendio
When you work with Lendio, you’ll get access to its network of over 75 lenders. A single application with this company gives you multiple chances to get approved and more options for the best rates and loan terms that suit your needs. Doing so can save you time and money from applying separately to multiple lenders on your own.
One downside is that you may not know the exact qualification requirements until after you apply because its lending partners may each have varying eligibility criteria. While Lendio does list minimum qualification requirements for both its CRE and SBA loan programs, it seems to imply that there may be some flexibility as failing to meet any of the criteria could just make it more challenging to get approved.
You can apply online from the Lendio website. Doing so allows you to quickly compare multiple loan options. The application process can be completed in under 15 minutes, and it comes at no cost and will not negatively impact your credit score. You can also find Lendio’s contact information to speak with a representative with any questions you may have.
U.S. Bank: Best for Long-term CRE or SBA Loans
Rates & Terms | |
Starting Interest Rate | 6.99% |
Loan Amount |
|
Loan Term | Up to 25 years |
Maximum LTV Ratio | 80% |
Estimated Closing Costs and Fees | 2% to 4% of loan amount |
Time to Fund | 30 to 45 days (Up to 90 days for SBA loans) |
Qualifications | |
Credit Score | 700 recommended |
Time in Business | 2 years recommended |
Annual Revenue | None |
DSCR | 1.25x recommended |
Why We Like U.S. Bank
U.S. Bank is our overall pick for borrowers looking for either SBA or CRE loans because of the combination of its rates and terms. Business owners should be aware, however, that U.S. Bank has strict qualification requirements as it typically requires good credit and strong finances to get approved.
Although you can visit the bank’s website for general information on its loan programs, most borrowers will need to call, submit an application, or schedule an appointment to get more details about available rates and qualification requirements. Representatives we’ve spoken to have stated that some programs may have flexibility in underwriting, so you may still be encouraged to apply even if you don’t meet the recommended qualifications stated in the table above.
Borrowers interested in getting an SBA loan should know that U.S. Bank is an SBA Preferred Lender. Preferred Lenders can make final credit decisions on behalf of the SBA, reducing turn times needed for a separate set of approvals and allowing you to get funding more quickly compared to other lenders.
Unlike some providers, U.S. Bank does not have an online application process for these loans. Instead, borrowers can schedule an appointment via the website or request a call to discuss the next steps.
SBG Funding: Best for Large SBA 7(a) Loan Amounts
Rates & Terms | |
Starting Interest Rate | 11% (prime plus 2.5%) |
Loan Amount | Up to $10 million |
Loan Term | 2 to 10 years |
Maximum LTV Ratio | Typically 90% |
Estimated Closing Costs & Fees | 1.5% to 2.5% of loan amount |
Time to Fund | 30 to 90 days |
Qualifications | |
Credit Score | 650 |
Time in Business | 2 years |
Annual Revenue | Not stated, but must be considered profitable |
DSCR | 1.25x recommended |
Why We Like SBG Funding
SBG Funding is an excellent option for borrowers seeking an SBA 7(a) loan. 7(a) loans are the most popular SBA loan program, and funds can be used for a wide range of uses—including real estate, working capital, business debt, equipment, and inventory.
This provider offers up to $10 million in financing, significantly more than the $5 million most SBA 7(a) lenders issue. Repayment terms, however, are limited to 10 years, so you may find your monthly payments to be higher.
While SBG Funding lists some of its minimum requirements for credit and time in business, other items related to finances, such as cash flow and debt, can be flexible depending on the overall strength of your application. Businesses that are weak in any area of their loan application may need additional compensating factors to get approved.
To learn more or to apply, visit the SBG Funding website. Borrowers can get a more streamlined process by having the most recent four months of business bank statements available, along with identifying documents, such as a driver’s license.
RCN Capital: Best for Low Payments, Long Repayment Terms & Low Rates
Rates & Terms | |
Starting Interest Rate | 6.49% to 10.99% |
Loan Amount | $50,000 to $10 million |
Loan Term | Up to 30 years |
Maximum LTV Ratio | 80% to 85% |
Estimated Closing Costs and Fees | 1% to 4% of the loan amount |
Time to Fund | 1 to 3 weeks |
Qualifications | |
Credit Score | 620 to 680 depending on loan program |
Time in Business | None |
Annual Revenue | Varies |
DSCR | As low as 1.10x, but may vary |
Why We Like RCN Capital
RCN Capital is a commercial lender that offers loans for business purposes. Loans must be backed by nonowner occupied and commercial properties and be issued to a business entity. The provider offers several different types of loans depending on your needs, including the following:
- Fix and flip loans
- Long-term rental loans
- Multifamily loans
- New construction loans
Depending on the loan program you choose, options may also be available for purchases, rate and term refinances, and cash-out refinances. Some programs may also have a minimum required property value of either $50,000 or $100,000.
Businesses that work with RCN Capital will not typically have to pay any upfront fees during the pre-approval or approval process. Some exceptions may apply, such as third-party fees for things like appraisals, environmental studies, or other project feasibility reports, which would need to be paid upfront by the borrower.
To apply, visit the RCN Capital website to complete an online application.
SMB Compass: Best SBA 504 Loans for Major Fixed Assets
Rates & Terms | |
Starting Interest Rate | 4.29% to 5.22% |
Loan Amount | $500,000 to $20 million |
Loan Term | 10 to 30 years |
Maximum LTV Ratio | 90% |
Estimated Closing Costs and Fees | 2% to 4% of the loan amount |
Time to Fund | 30 to 90 days |
Qualifications | |
Credit Score | Not stated, 650 minimum recommended |
Time in Business | 2 years recommended |
Annual Revenue | Varies |
DSCR | 1.25x recommended |
Why We Like SMB Compass
SMB Compass offers different types of SBA loans, but it can be a particularly good choice for its SBA 504 program. This is because in addition to competitive rates, its 504 loans offer up to $20 million, much more than the typical $5 million offered by other lenders for this type of financing.
SBA 504 loans must be used for financing major fixed assets that promote business growth and job creation. Some examples of this could include buildings, land, parking lots, office buildings, machinery, and other equipment. If you need other financing, consider the other SBA loan programs offered by this provider.
SMB Compass recommends borrowers prepare the following documents to ensure a streamlined process:
- Applicable business licenses and certifications
- Proof of business ownership
- Two years of personal and business tax returns
- Financial statements, such as profit and loss statements, balance sheets, and cash flow statements
To apply or learn more, visit the SMB Compass website.
JPMorgan Chase: Best for Multifamily Apartment Financing & Flexible Loan Terms
Rates & Terms | |
Starting Interest Rate | 7% and up |
Loan Amount | $500,000 to $25 million-plus |
Loan Term | Up to 30 years |
Maximum LTV Ratio | 80% |
Estimated Closing Costs and Fees | Greater than $2,000 or 0.125% of the loan amount |
Time to Fund | 30 to 45 days |
Qualifications | |
Credit Score | 680 |
Time in Business | 2 years |
Annual Revenue | Varies |
DSCR | 1.25x |
Why We Like JPMorgan Chase
JPMorgan Chase has a commercial term lending program that can finance apartment buildings with five or more units. In addition, it offers a wide range of options for repayment terms.
Some examples of repayment terms available include balloon payments, fully amortized loans, adjustable-rate loans, and fixed-rate loans for up to 30 years. Interest-only payment options are also available on a case-by-case basis for up to three years and require a minimum loan amount of $1 million.
JPMorgan Chase also provides financing for other property types, including industrial, office, retail, and mixed-use properties.
One downside of this lender is its ability to offer financing in just 13 major US markets According to the website, it’s available in Boston; Chicago; Denver; Los Angeles; Minneapolis; New York; Orange County, California; Portland, Oregon; Sacramento, California; San Diego; San Francisco; Seattle; and Washington, D.C. . If you’re interested in applying or learning more, you can visit the JPMorgan Chase website to determine if financing is available in your location.
1West: Best for Low Credit Scores
Rates & Terms | |
Starting Interest Rate | 6% |
Loan Amount | $100,000 to $20 million |
Loan Term | 6 months to 5 years |
Maximum LTV Ratio | 80% |
Estimated Closing Costs and Fees | 1% to 3% of the loan amount |
Time to Fund | 2 to 3 weeks |
Qualifications | |
Credit Score | 500 |
Time in Business | 2 years |
Annual Revenue | Varies |
DSCR | Not stated |
Why We Like 1West
1West is a loan broker with over 50 lenders in its network. It has one of the lowest credit score requirements in our guide, making it a good option if you have blemishes on your credit report.
Its CRE loans are available in all 50 states and can be used for the purchase, renovation, or expansion of a new or existing commercial property. It commonly deals with businesses that need funding for offices, retail spaces, hotels, and apartments. CRE loans can be made to a wide range of business entities, including partnerships, developers, trusts, corporations, and real estate investment trusts (REITs).
With 1West, you also have the option to get funding with no minimum gross sale requirement. Loans can also be issued in either a first or second lien position, and interest-only options are available if you want to have lower monthly payments.
To learn more or to submit a loan application, visit the 1West website.
Lima One Capital: Best for Distressed Properties
Rates & Terms | |
Starting Interest Rate | Not stated, but estimated from 8% to 11% |
Loan Amount | Up to $10 million |
Loan Term | 24 to 36 months |
Maximum LTV Ratio | 80% |
Estimated Closing Costs and Fees | 2% to 3% of loan amount |
Time to Fund | 1 to 3 weeks |
Qualifications | |
Credit Score | Varies based on the loan program |
Time in Business | Varies based on the loan program |
Annual Revenue | Varies based on the loan program |
DSCR | 1.25x recommended |
Why We Like Lima One Capital
Lima One Capital is a commercial lender that offers several different types of loans for multifamily properties. If you’re having trouble getting approved elsewhere due to property issues, Lima One Capital might be able to help, as it has programs to finance low cash flow properties, properties with low occupancy rates, and more.
The multifamily programs offered by Lima One Capital include:
- Value-add bridge: Ideal for distressed properties needing rent increases and capital expenditures
- Stabilized bridge: Good for turn-key properties needing more seasoning or further tenancy before long-term takeout
Depending on the loan program you choose, amortized and interest-only payment options can be selected. Nonrecourse lending is also available if you want to better protect your personal assets from being seized in the event you default on loan payments.
Besides offering loans for multifamily properties, Lima One also offers financing for rentals, new construction, and fix and flip properties. Head over to the Lima One Capital website to learn more or to submit an application.
How We Chose the Best Commercial Real Estate Lender
Our selection of the best commercial real estate loans was based on the following criteria:
- Interest rates (check out our guide on what impacts CRE rates)
- Loan terms and repayment options
- Maximum loan amount
- Qualification requirements
- Down payment requirements
- Application, approval, and funding speed
- Customer reviews and ratings
Alternatives to a Commercial Real Estate Loan
If you’re unable to get a CRE loan, you can still acquire commercial properties by using other types of financing. You should have an easier time getting a small business loan with the following options as they don’t carry the typical qualification requirements of a CRE loan:
- Hard money loans: Some of the best hard money lenders can provide short-term loans that typically require repayment within two to three years. This can allow you to acquire a property now and give you time to improve your business finances or credit to replace it with a permanent source of financing in the future.
- Loans from friends and family: This can be a good option for businesses wanting to be able to negotiate the terms of a loan. In many ways, there are also no qualification requirements, although we do advise reading our recommendations for how to ask friends and family for funding.
- Rollover for business startups (ROBS): A ROBS isn’t a loan but instead a way to access your retirement accounts tax- and penalty-free. You’ll typically need at least $50,000, and we recommend using one of the best ROBS providers to help you through the process to avoid compliance issues, fines, or penalties.
Frequently Asked Questions (FAQs)
CRE loans typically have repayment terms of up to 25 years, requiring monthly payments. These loans may have an amortization length longer than the term of the loan, requiring a final lump sum balloon payment. Other loans may be fully amortized and structured such that the entire balance will be paid off as long as you make the monthly payments on time for the entire duration of the loan.
Yes, these loans can have more strict documentation and qualification requirements than other types of business loans. You’ll typically need a down payment of at least 10% to 20%, a strong credit score, and proof that your business is profitable.
Rates can range from around 4% to 11%. This will depend on the type of CRE loan you’re getting, the lender you decide to work with, as well as your own business qualifications. You can check out our guide discussing the different types of CRE loans for more information on your available options, and what each can offer for rates and terms.
Bottom Line
The CRE lenders we’ve selected offer a wide range of loan types, and you can read our guide on CRE loans to learn more about which might be best suited for you. The lenders on our list that have easy qualification requirements tend to have higher rates, while those with lower rates and fees often require you to have excellent business credit and finances. To get the best loan for your scenario, it’s important to shop rates with multiple lenders.