How To Avail Commercial Real Estate Loan

Want to get a commercial real estate loan? Here are certain things that you should not forget about, such as Invoice Factoring. The article below will significantly help you get approval for commercial real estate finance.

What Is Commercial Real Estate Loan

Commercial real estate loans refer to the properties where a business owner invests for income purposes. Just like the residential loan, the commercial property loan is also a mortgage secured by the bank itself.

However, the investment in Commercial Financing is a bit more expensive than residential ones. Here the retail outlets are sold at a higher rate than the residential ones.

But there are many ways you can earn from commercial real estate; such as:

  • A Huge Tax Benefit
  • Tenant Rent
  • Services Fees (Parking, Vending, Etc.)
  • Expense Recovery, Etc.

How Commercial Real Estate Loan Work

The commercial real estate loan can be availed for purchasing new land or developing existing properties. In that case, the examples of the eligible property include:

  • Building
  • Office Space
  • Retail Shop
  • Shopping Centre


Required Documents For Availing Commercial Real Estate Loans

You should have a steady source of income to avail yourself of the commercial real estate loan. As per the state law of different places, the candidate should be in the suitable age bracket and have commercial property free from legal concerns. In that case, availing of a Credit score near 750 is compulsory. You may need the following documents, such as:

  • Identity proof such as PAN card/Voter’s ID/Driving License/Passport
  • Income source and proof of income such as income tax return, bank statement a d etc.
  • Other business-related papers and documents.

However, you may need to show more based upon further verification and inspection.

How To Avail Commercial Loan For Real Estate Loan

Availing of loans for commercial real estate is daunting. In this purchase, everything is dependent upon the bank, whether they say yes or no. Here are the steps to get approval for a commercial real estate loan.

  • Show Profitability: The first and foremost thing that decides whether you are eligible for the loan is to have a profitable company. The bank may not approve your business to get a loan if there is no proven record of profit.
  • Access Your Need First: You should present solid planning for your upcoming project. So make sure your financing request to the bank is not poorly thought out. Whether you plan to buy or take a lease, you should figure out your budget, desired location, square foot need etc. Sometimes, the businesses now look for future expansion and state their current conditions in the plot.

It would help if you also considered the extra costs associated with the property, along with the purchase price. The associated costs can include due diligence costs, renovation, production downtime etc.


Here the different types of commercial loans are given below:

  1. Purchase Loan: The purchase loan is only available for purchasing any property. Often it comes with a hectic loan amount, and the repayment terms can be availed up to 20 years.
  2. Construction Loan: The construction loan usually comes with a shorter repayment term. This loan is for only building the property. After that, people can refinance it.
  3. Refinancing Loan: The refinancing Loan is famous for its lower rate. However, refinancing a loan is similar to a personal loan.
  4. Hard Money Loan: The hard money loan works best for those who want to flip their property. The hard money loan comes with a higher interest rate than usual.
  • The Lender Should Be Right: Once you have decided on the type and assessed your need, now the time is to find the right lender who can help you to extend your commercial property loan. However, finding a lender is not easy as picking one that works best for you. Generally, the banks are credit unions with strict lending policies that may influence the decision.


Getting approval for Commercial Real Estate Loans is not easy. But knowing the expectation from the planning and financing request can make things easier. If you are planning to get a commercial real estate loan, then the above steps are mandatory to proceed further in your incoming project.

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