Commercial Property Loans: Everything You Need to Know

Did you know in 2022 that around $26 billion was given to small businesses through commercial property loans? 

As a small company, it’s important that you have a good commercial space to handle your operations. Many business owners are intimidated by the idea of getting a property loan, but it can be beneficial. 

This article is going to tell you everything you need to know about property loans and the easiest way to get one. Continue reading so you’re prepared to get a real estate loan now or in the future. 

Know What Lenders Look For

Before applying for commercial property loans, you must know what lenders are looking for. This information will help you prepare and give you a better chance of getting approved. 

Business Credit

One of the first things a lender will look at is your business’s credit. You should have your business set up as an LLC (limited liability company) or as an S corporation. It may make it harder to get a commercial real estate loan if set up under a different entity. 

There are multiple aspects that ate affected by your business’s credit score. The amount that you have toward the down payment, interest rate, and the length of the loan are all dependent on the score, and the higher the better. 

If your company has a low score, don’t worry, there are expectations. However, it’s best if you can get it back up as soon as possible, so you get the best deal. 

Property Characteristics

It may seem odd, but the lender is going to look at the property you are purchasing. As a small business, you are required to take up a certain amount of space to be qualified for a commercial property loan.

It’s likely that the lender will place a lien on your property until you have it paid off. This acts as collateral and protects them in case you cannot pay. 


The lending company is also going to look at not only your company’s finances but your personal ones as well. The reason a lender checks your company’s finances is that they must ensure you have enough money coming in each month to pay back the loan.

They will check your personal to make sure you are in good financial standing. If you’ve defaulted before or have low credit, it will make it harder for your business to get approved. 

Preparing for the Application Process 

The paperwork that’s needed for the application process is sizeable, but don’t get overwhelmed yet. The lender wants to make sure you’re going to pay them back so they will typically want to see a business plan.

What are your financial predictions? What goals do you have for the company and how are you going to reach them? These are two common questions that can help you create your business plan to give to the lender. 

You’ll also need to gather your tax forms for the company, along with your financial records. Any records you have may prove to be helpful, too. Better to have it ready in case they ask than to have to spend even more time gathering it up later.  

Months’ worth of bank statements and a property appraisal from a third party may be required. All these factors are put in place to protect both parties. 

Get Approved

It can be challenging to get a commercial property loan if you’re a new company or if you have bad credit. However, there are a few things you can do to improve your chances. 

First, you’ll want to pay off as much of your existing debt as you can. Choosing a less expensive property can also help, but if that’s not an option, you can pay a larger down payment. While it may not be ideal, you may want to consider bringing on another investor or consignor. 

Types of Loans

Typically, commercial property loans are going to be shorter than residential mortgages. You can; however, get a longer one or even a renewable loan. This can be beneficial as you can pay off your first loan and still have enough to keep revenue up. 


If you’re on the fence about applying for a loan, it may be helpful for you to know the benefits. Commercial property loans are often paid over a long period of time between three and fifteen years.

This will allow you to grow your business and pay off your loan slowly. If your business is in good financial standing, you can get a lower interest rate, which is key. You can also get access to a large sum of money, which will help cover a lot of your start-up costs or overhead fees that may pile up before you start making a profit. 

Make the Most of Commercial Property Loans

Needing a commercial property loan is a great sign. It means your business is growing and expanding. Owning a commercial property can be a good investment, whether you’re planning on occupying the space for an extended period of time or not. 

Obtaining commercial property loans can be overwhelming, though. There is a lot of paperwork and it’s hard to know which is the best loan for your company. However, we are here to help.

Our team of professionals can help you get financing and walk you through the entire process. Contact one of our loan officers to get started. You can also make an application for pre-approval.

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