Commercial real estate financing insights
Direct answers for borrowers comparing lenders, structures, and underwriting requirements.
- Guides
- 21
- Figures
- Primary sources or labeled hypothetical examples
- Loan size we arrange
- $1M to $100M
Rates and requirements
Bridge loan rates and costs in 2026
A commercial bridge loan is usually priced at a spread over SOFR with a floor, plus origination points at closing and often an exit fee at payoff. Extension fees, a required rate cap, minimum interest, and lender legal costs add to the total. The best way to compare bridge loans is total cost of capital over the expected hold, including an extension and an early payoff case.
Commercial construction loan rates in 2026
Commercial construction loans almost always carry a floating rate, priced as a spread over prime or SOFR with a floor. Interest accrues only on the drawn balance and is usually paid from an interest reserve inside the loan. The true cost of a construction loan is the note rate plus origination fees, draw and inspection costs, and the interest reserve, measured against a balance that grows month by month.
Commercial construction loan requirements checklist
A commercial construction loan requires an experienced sponsor with liquidity to cover overruns, a controlled and entitled site, permit-ready plans, a detailed budget with contingency, a signed contract with a qualified general contractor, cash or land equity that funds ahead of the loan, a funded interest reserve, and a credible takeout. Lenders also order an as-completed appraisal, an environmental report, and an independent plan and cost review before closing.
Commercial DSCR loan requirements in 2026
A DSCR requirement is the minimum ratio of net operating income to annual debt service that a lender will accept, and it caps the loan amount. Freddie Mac's conventional fixed-rate term sheet sets a 1.25x minimum amortizing DCR. HUD's market-rate multifamily programs use 1.15x. SBA's standard 7(a) program requires 1.15x on business cash flow. Banks, life companies, CMBS lenders, and debt funds set their own minimums by property type, leverage, and rate.
Commercial real estate loan rates in 2026
A commercial real estate loan rate is a benchmark index plus a lender spread. Fixed-rate loans usually price over a Treasury yield or swap rate that matches the term, floating-rate loans price over SOFR, and many bank loans price over prime. The spread reflects leverage, debt service coverage, property type, sponsor strength, recourse, and market. The index moves daily, so a real quote only exists for a specific deal on a specific date.
Commercial real estate loan requirements
To qualify for a commercial real estate loan, the property must produce enough income and hold enough value to pass the lender's coverage and leverage tests, and the borrower must show a qualified entity, relevant experience, post-closing liquidity, net worth, clean credit, and a complete document package. Lenders underwrite the property first and the sponsor second, and each lender sets its own thresholds by program, property type, and risk appetite.
Comparisons
Bridge loan vs hard money loan: which fits your deal?
Choose a bridge loan when a transitional property has a sponsor, a business plan, and a refinance or sale exit that a lender can underwrite, and you want proceeds sized to total cost or future value. Choose a hard money loan when speed, a title or credit problem, or thin documentation rules out that review and the current collateral value has to carry the loan on its own. Hard money usually costs more and lends less against the same property.
Bridge Loan vs. Bank Loan for Commercial Real Estate in 2026
Compare commercial bridge loans and bank loans by proceeds, timing, recourse, property condition, underwriting, exit strategy, and total execution risk.
CMBS vs bank vs life company loans: which lender fits?
A bank loan fits relationship borrowers, transitional or owner-user properties, and sponsors who value prepayment flexibility and can accept recourse. A CMBS loan fits stabilized income property that needs fixed-rate, non-recourse debt and can accept rigid servicing and defeasance or yield maintenance. A life company loan fits high-quality, lower-leverage stabilized property where long fixed terms and conservative structure matter more than maximum proceeds.
Construction loan vs bridge loan: which one does your project need?
Use a construction loan when the building does not exist yet or the work is so extensive that the property cannot operate while it happens. The lender funds through draws against an approved budget and sizes to total project cost. Use a bridge loan when an existing building needs lease-up, repositioning, or a moderate renovation. The lender funds most proceeds at closing and sizes to as-is and as-stabilized value.
Mezzanine debt vs preferred equity: how do they differ?
Mezzanine debt is a loan secured by a pledge of the ownership interests in the property owner, so a default leads to a foreclosure on those interests under an intercreditor agreement. Preferred equity is an ownership stake with a priority return, and its remedies come from the operating agreement. Mezzanine usually fits when the senior lender permits it and the sponsor wants a defined debt cost. Preferred equity fits when the senior loan bars subordinate debt or the gap needs flexible payment terms.
Recourse vs non-recourse commercial loans
A recourse loan lets the lender pursue the borrower and guarantors for any shortfall after the property is sold. A non-recourse loan limits recovery to the property, except for carve-outs such as fraud, unapproved transfers, and voluntary bankruptcy. Recourse is common on construction, transitional, smaller, and relationship bank loans. Non-recourse is common on stabilized properties financed through agency, CMBS, life company, and many debt fund programs, which usually bring tighter structure.
SBA 504 vs. 7(a) for Owner-User Commercial Real Estate
A practical comparison of SBA 504 and 7(a) financing for owner-user commercial real estate, project costs, occupancy, business cash flow, and closing.
Yield Maintenance vs. Defeasance: Commercial Loan Prepayment Explained
How yield maintenance and defeasance work, what drives their cost, which lenders use each, and how borrowers negotiate prepayment terms before signing a commercial loan.
How financing works
How Commercial Construction Lenders Underwrite in 2026
A lender-side guide to commercial construction underwriting, including land basis, budget, contingency, equity, guarantors, draws, carry, lease-up, and takeout.
How much is the down payment on commercial property?
There is no fixed down payment on commercial property. Your equity equals total cost minus the loan, and the loan is the smallest amount allowed by the lender's loan-to-value, loan-to-cost, debt service coverage, and debt yield tests. SBA programs publish minimums: a standard SBA 504 project needs at least 10% from the borrower, and a 7(a) loan to a start-up business needs at least 10% of total project costs.
How to Finance a Gas Station or C-Store in 2026
A direct guide to gas station and c-store financing, including environmental work, fuel agreements, construction, SBA eligibility, and lender review.
How to Get a Commercial Real Estate Loan: A Step-by-Step Guide
How to get a commercial real estate loan from $1M to $100M: define the request, size it the way lenders do, choose the right lender type, prepare the package, and close.
The Commercial Real Estate Capital Stack Explained
How the commercial real estate capital stack works: senior debt, mezzanine debt, preferred equity, and common equity, their priority, cost, and control rights.
Types of commercial real estate lenders
The main types of commercial real estate lenders are banks, credit unions, life insurance companies, CMBS conduit lenders, agency lenders for Fannie Mae and Freddie Mac, HUD-insured lenders, SBA lenders, debt funds, and private lenders. Each one raises capital differently, which sets its cost, leverage, recourse, flexibility, and the property types and business plans it will finance. Choosing the right type for a deal matters as much as choosing a lender within that type.
What does a commercial mortgage broker do?
A commercial mortgage broker represents a borrower in arranging debt or equity for commercial real estate. The broker evaluates the deal, structures and packages the request, identifies the lenders whose current criteria fit, runs a competitive process, negotiates term sheets, and manages the loan through closing. The broker does not lend its own money. Borrowers use brokers to reach more lenders, avoid ones that will not fit, and get better terms and execution certainty.