Everything you need to know about CRE financing: 10 loan types compared, current 2026 rates, qualification requirements, and the underwriting metrics that determine your approval. Written for borrowers, not bankers.

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Loan Types Compared

5.5–12%

2026 Rate Range

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FUNDAMENTALS

What Is a Commercial Real Estate Loan?

A commercial real estate loan is a mortgage used to purchase, refinance, construct, or renovate income-producing commercial property. Unlike residential mortgages that evaluate the borrower’s personal income and credit, CRE loans are underwritten primarily on the property’s financial performance — its net operating income (NOI), debt service coverage ratio (DSCR), and the loan-to-value ratio (LTV).

Commercial properties include multifamily apartments (5+ units), office buildings, retail centers, industrial warehouses, hotels, self-storage facilities, medical offices, mixed-use buildings, restaurants, and special-purpose properties like car washes and gas stations.

Commercial RE Loan

Residential Mortgage

Underwriting Focus

Property income (NOI, DSCR)

Borrower income (DTI)

Down Payment

10 – 35%

3 – 20%

Loan Term

5 – 25 years (balloon common)

15 – 30 years (fully amortizing)

Rate Range

5.5 – 12%+

6.0 – 7.5%

Recourse

Both available

Full recourse (typical)

Approval Timeline

14 – 90 days

30 – 45 days

Lender Types

Bank, CMBS, SBA, Agency, Private

Bank, Credit Union

10 CRE LOAN TYPES COMPARED

Find the Right Financing Structure for Your Deal

Each loan type is designed for a specific scenario. Match your property type, timeline, and investment strategy to the right product.

Conventional Bank Loan

Rate6.0 – 8.5%

LTV75 – 80%

Term5 – 10 yr

Best forStabilized, relationship

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CMBS / Conduit

Rate5.75 – 8.0%

LTV65 – 75%

Term5 – 10 yr

Best forNon-recourse, $2M+

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SBA 504

Rate6.0 – 7.0% fixed

LTVUp to 90%

Term25 yr (CDC)

Best forOwner-occupied, 10% down

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SBA 7(a)

RatePrime + 2.75%

LTV85 – 90%

TermUp to 25 yr

Best forMixed-purpose, flexible

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Bridge Loan

Rate7.0 – 12%

LTV65 – 80%

Term12 – 36 mo

Best forTransitional assets

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Construction Loan

Rate6.0 – 8.5%

LTC70 – 80%

Term12 – 24 mo

Best forGround-up builds

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DSCR Loan

Rate6.5 – 9.0%

LTV65 – 75%

Term5 – 30 yr

Best forNo income docs needed

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Mezzanine Debt

Rate8 – 15%

Combined LTV75 – 90%

Term2 – 7 yr

Best forGap funding, leverage

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Fix & Flip / Value-Add

Rate8 – 13%

LTC80 – 90%

Term12 – 36 mo

Best forRenovation + resale

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Land Loan

Rate7 – 12%

LTV50 – 65%

Term1 – 5 yr

Best forDevelopment sites

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HOW LENDERS EVALUATE CRE DEALS

The Three Metrics That Determine Your Loan

CRE lenders size loans using three primary metrics. Your loan amount will be the lowest amount calculated by these three constraints. Understanding them puts you in control of the conversation.

DSCR

Debt Service Coverage Ratio

NOI ÷ Annual Debt Service. Measures whether the property’s income can cover mortgage payments. Most lenders require 1.20x–1.25x minimum. Higher DSCR = better rates.

LTV

Loan-to-Value Ratio

Loan Amount ÷ Appraised Value. Measures leverage risk. Conventional CRE maxes at 75–80%. SBA goes to 90%. Lower LTV = better terms for you.

Debt Yield

NOI ÷ Loan Amount. The return the lender would earn if they foreclosed. CMBS and institutional lenders require 8–10%+. Increasingly the primary sizing constraint.

NOI

Net Operating Income

Gross Revenue – Operating Expenses (excluding debt service). The foundation metric that feeds DSCR, cap rate, and debt yield. Accurate NOI projection is everything.

CAP

Capitalization Rate

NOI ÷ Property Value. Used to determine the property’s value relative to its income. Lower cap rates = higher values. Varies dramatically by property type and market.

LTC

Loan-to-Cost

Loan Amount ÷ Total Project Cost. Used for construction and value-add deals where appraised value isn’t yet established. Typically 70–90% depending on project type.

Run these numbers yourself with our free calculators: DSCR Calculator · LTV Calculator · NOI Calculator · Cap Rate Calculator · Debt Yield Calculator

FREQUENTLY ASKED QUESTIONS

Commercial Real Estate Loan FAQ

How much down payment do I need for a commercial property?

It depends on the loan type. SBA 504 requires as little as 10%. Conventional bank loans typically require 20–25%. CMBS loans require 25–35%. Bridge and hard money may require 20–35%. The more you put down, the better your rate and terms will be.

What credit score do I need for a CRE loan?

Most bank and SBA lenders want 680+ FICO. CMBS lenders focus more on the property than the borrower. Hard money and bridge lenders may accept 600+. For the best rates across all products, aim for 700+ with clean credit history.

What is the difference between recourse and non-recourse?

A recourse loan means you’re personally liable if the loan defaults. A non-recourse loan limits the lender’s recovery to the property itself. CMBS, agency, and some portfolio loans offer non-recourse. Bank loans are typically full recourse. Non-recourse comes with slightly higher rates but significant liability protection.

How long does it take to close a commercial real estate loan?

Hard money: 7–14 days. Bridge: 14–30 days. Bank/conventional: 30–45 days. SBA 7(a): 30–60 days. SBA 504: 45–90 days. CMBS: 45–90 days. Having your documents ready before you apply is the single biggest factor in reducing timeline.

Can I get a commercial loan for a property I don’t occupy?

Yes. Investment property loans (conventional, CMBS, DSCR) don’t require owner occupancy. SBA loans (504 and 7a) require 51%+ owner occupancy. Choose your program based on whether you’re an owner-occupant or investor.

How do I choose the right CRE loan type?

Start with your property type and investment strategy. Owner-occupied? SBA 504 or 7(a). Stabilized investment? CMBS or bank. Transitional? Bridge. Construction? Construction loan. Multiple properties? Blanket loan. Not sure? Our advisors compare all options for your specific deal at no cost.

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Commercial Real Estate Loans Explained

What Is a Commercial Real Estate Loan?

Find the Right Financing Structure for Your Deal

The Three Metrics That Determine Your Loan

Commercial Real Estate Loan FAQ

Not Sure Which CRE Loan Fits Your Deal?

Other lenders make promises.We put them in writing.

Five things your last lender should have done.

Other lenders make promises.
We put them in writing.