How it works
Commercial property financing may support owner-occupied premises or investment property, with different underwriting approaches. Lenders assess property value, income or business cash flow, security, and borrower contribution.
Where it can fit
Build a full project budget that includes closing costs, appraisal, environmental work, improvements, taxes, and contingencies. A property purchase can strengthen a business while still tying up working capital that operations need.
Look closely at the trade-offs
Amortization and term are often different. A loan amortized over a long period may mature much earlier, requiring renewal or refinancing. Consider vacancy, variable rates, maintenance, tenant concentration, and balloon risk where relevant.
Your next-step checklist
- Purchase agreement and property details
- Operating or rental cash flow
- Down payment and closing funds
- Appraisal and environmental conditions
Crack this combination.
Can the maturity date arrive before amortization is complete?
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Sources & further reading
This file draws on the following references. Product availability and requirements must be confirmed with the provider.
Levr: loan typesLevr: reviewing a debt term sheet