Best Commercial Real Estate Loans 2021

Buy, build, or beautify your business property with these commercial real estate financing options.
Best overall
Lendio
Lendio
  • Icon Pros  Dark
    Variety of lenders and loans
  • Icon Pros  Dark
    Fast, easy application
Best smaller loans
Bank of America
Bank of America
  • Icon Pros  Dark
    Smaller loans available
  • Icon Pros  Dark
    Limited-time low interest rates
Best for SBA loans
SmartBiz
SmartBiz
  • Icon Pros  Dark
    Simplified SBA application
  • Icon Pros  Dark
    One application for many lenders
Best hard money loan
Flip Funding
Wells Fargo
  • Icon Pros  Dark
    Variety of hard money loan types
  • Icon Pros  Dark
    Fast closing turnaround
Best for main space
PNC
PNC
  • Icon Pros  Dark
    Choice of interest rate types
  • Icon Pros  Dark
    Several term options

Many business loans are pretty versatile. Your standard term loan or line of credit can pay for a new coffee machine, fund a marketing campaign, or cover the bills when you have cash flow issues.

But if you’ve got your eyes on real estate for your business—be it office buildings you can lease out, a warehouse for your inventory, or a remodel to your current medical office—any old business loan won’t do. You need a commercial real estate loan.

So let’s find the right real estate loan for your business. We’ll tell you about the best commercial real estate loans out there, including what types exist and who has them.

Ready to get that real estate?

The best commercial real estate loans 2021

Compare the best commercial real estate loans

Company
Loan min./max.
Lowest listed rate
Min. annual revenue
Min. time in business
Get a loan

Lendio

$250,000/$5 million

4.25%

UnlistedUnlisted

Bank of America

$25,000/$5 million

3%

$250,000

2 yrs.

SmartBiz

$500,000/$5 million

6.25%

$50,000

3 yrs.

Flip Funding

$50,000/$10 million5%UnlistedUnlisted

PNC

$100,001/$3 million

Unlisted

N/A

3 yrs.

Wells Fargo

$50,000/$1 million

Unlisted

Unlisted

Unlisted

U.S. Bank

Unlisted

Unlisted

Unlisted

Unlisted

Santander

$25,000 and up

Unlisted

Unlisted

Unlisted

Chase

$50,000 and up

Unlisted

Unlisted

Unlisted

Data effective 11/20/20. At publishing time, amounts, rates, and requirements are current but are subject to change. Offers may not be available in all areas.

Info
Application requirements
Some lenders don’t list specific application requirements, like annual revenue, but that doesn’t mean they don’t care. If a lender wants your business to be at least three years old, you can guess that it also expects you to make a healthy amount of revenue.

Lendio: Best overall for commercial real estate loans

Lendio

When you apply through Lendio’s business lending marketplace, one loan application can get matched with many commercial real estate lenders.

We strongly recommend making Lendio the first stop on your commercial real estate loan journey. That’s because Lendio is what’s called a lending marketplace. All you have to do is submit a single application to Lendio, and it will shop around and find the best-matching loans for you and your business. This process works for many kinds of loans and lines of credit—including commercial real estate loans.

In fact, Lendio might even match you with one of the lenders on this list. You’ll get the same great rates as if you applied directly to the lender, but you also get the added convenience of getting to compare offers from various lenders. Lendio makes loan shopping faster and more convenient. So when you’re ready to apply for a commercial real estate loan, go to Lendio first.

Strengths
Pro Bullet Fast application
Pro Bullet Wide variety of financing and lenders
Pro Bullet Personalized guidance and expertise
Weaknesses
Con Bullet High interest rates on some loans
Con Bullet Reports of hard credit inquiries

Bank of America: Best for smaller commercial loans

Bank of America

Not everyone needs a million-dollar real estate loan. If you want something smaller, give Bank of America a look.

You may have noticed that commercial real estate loans are big. Like, really big sometimes. The maximum amounts often stretch into the millions, and the minimums are often much higher than the minimums on other types of loans. But what if you don’t want a giant loan? Bigger isn’t always better, especially when it comes to paying back a loan—plus interest. Thankfully, Bank of America has you covered.

Bank of America offers smaller real estate loans, with amounts as low as $25,000— perfect for buying a small plot of land to put a drive-thru food shack on or for making moderate upgrades to your office space. You can still get the favorable rates and terms that real estate loans are known for, but without the giant loan sizes. Now, qualifying for Bank of America business loans is no easy thing, and its real estate loans have even higher application requirements than its other loans. But if you can qualify and you want a smaller loan amount, Bank of America is a great choice.

Strengths
Pro Bullet Small loan amounts available
Pro Bullet Long repayment terms
Pro Bullet Limited-time low interest rates
Weaknesses
Con Bullet Strict borrower qualifications
Con Bullet High applicant rejection rates

SmartBiz: Best for SBA real estate loans

SmartBiz

If you’re interested in SBA real estate loans, it’s hard to go wrong with SmartBiz’s SBA loan marketplace.

Have you considered SBA real estate loans? Thanks to the U.S. Small Business Administration (SBA), you can get government-backed loans that come with low rates and long terms. Note that you get these loans through normal lenders—the government simply guarantees part of the loan—which means you’ll need to shop around to find a lender that fits your needs and will accept you. Or you could just apply with SmartBiz.

Much like how Lendio is a lending marketplace for business loans, SmartBiz is a lending marketplace specifically for the SBA loan program. (SmartBiz is for SBA 7(a) loans only, so you won’t be able to get CDC/SBA 504 loans.) Just fill out SmartBiz’s application, and it will try to match you with a variety of SBA lenders.

Put simply, don’t waste your time applying for SBA loans the traditional way―SmartBiz offers a more convenient and faster alternative.

Strengths
Pro Bullet Fast application
Pro Bullet Wide variety of financing and lenders
Pro Bullet Personalized guidance and expertise
Weaknesses
Con Bullet High interest rates on some loans
Con Bullet Reports of hard credit inquiries

Flip Funding: Best for hard money loans

Flip Funding

If you need short-term financing for rehabbing and flipping real estate, Flip Funding offers the best loan options.

Many lenders can help you buy real estate, but they’ll usually expect your property to be in good condition. So what if you want to buy property to fix and flip? Then you want a commercial hard money loan, like the ones Flip Funding offers. Hard money loans offer short-term funding for your rehab projects. When you’re done with your rehab, you can either refinance the loan or sell the property to pay it off.

Flip Funding offers a nice variety of hard money financing. For example, you can get a line of credit designed for repeat rehabbers, a rehab-only loan to finance repairs on a property you own, and a fix and flip loan for buying and flipping. And Flip Funding can help you close quickly, so you never have to lose out on a great deal.

Just remember that, as with any hard money lender, you should have a plan for refinancing or paying off your Flip Funding loan by the end of the (short) loan term.

Strengths
Pro Bullet Several types of hard money financing
Pro Bullet No prepayment penalty on most loans
Pro Bullet Closing in as little as 7 days
Weaknesses
Con Bullet High starting rates
Con Bullet Short repayment terms

PNC: Best for owner-occupied commercial loans

PNC

If you’re purchasing or refinancing a property you’ll use and work in, you’ll like PNC’s great deals on real estate loans.

While some lenders are happy to fund your purchase of an investment property, PNC isn’t one of them. PNC offers commercial financing for only owner-occupied real estate. So if you’re planning on buying a new space for your photography studio, or you need a new law office and wouldn’t mind renting out some other units in the building, PNC might be perfect for you.

You’ll find both purchase loans and refinancing options at PNC, so you can buy a new place or refinance that construction loan. Just keep in mind that PNC loans aren’t as widely available as loans from other commercial lenders—PNC operates in only 21 states. But if you happen to be in one of them, PNC often has deals on real estate loans (like 0.5% off its current rate), making it a great lender for owner-occupied real estate.

Strengths
Pro Bullet Choice of interest rate types
Pro Bullet Several repayment term options
Pro Bullet Discount offers available
Weaknesses
Con Bullet Loans for owner-occupied real estate only
Con Bullet Availability in just 21 states
Money
Real estate loan rates
Want to know what kind of rates to expect on your commercial mortgage? Check out our guide to commercial loan rates.

Honorable mentions

The companies above are the best and brightest in commercial lending. But the lenders below are worth a look too.

Wells Fargo

Wells Fargo offers loans for purchasing and refinancing real estate, but its real standouts are equity loans. As you may know, equity loans let you use the equity you’ve built in real estate as collateral for a loan, which you can then use to fund all sorts of projects for your business. And Wells Fargo has not one but two real estate equity financing options: an equity loan and an equity line of credit.

U.S. Bank

U.S. Bank has term loans for both owner-occupied properties and investment properties, making it a good lender for both acquiring an office and opening an apartment complex. Terms on these loans vary from 5 to 25 years. 

Santander Bank

Santander Bank offers two types of real estate loans: purchase loans (for buying new property) and refinance/cash out loans (for refinancing existing real estate loans or making improvements). Its real estate loans are for owner-occupied properties only, and they have terms up to 25 years (with up to 10 years of fixed interest).

Chase

With Chase’s commercial real estate loans, you can construct, purchase, or refinance your real estate project. Like some other commercial lenders on this list, Chase’s loans are just for owner-occupied real estate (so it’s not the best bet for real estate investors). Its real estate loans start as low as $50,000, and Chase offers both fixed rate and variable rate interest options.

Grow your business today

Browse hundreds of loan options, custom-tailored to your business and budget needs, from a single, simple platform.

Types of commercial real estate loans

Now you know the best commercial real estate lenders. But what if you’re not sure what type of commercial real estate loans you should get? Here’s a quick primer.

Purchase loans

Like the name suggests, a purchase loan lets you purchase property for your business. If you hear someone talking about a commercial mortgage loan, this is usually what they mean. With a purchase loan, the real estate you purchase serves as collateral for the loan.

Construction loans

Construction loans are just what they sound like: commercial loans that fund the cost of building. These loans usually have relatively brief terms of 18 to 36 months, with the understanding that you’ll enter a commercial mortgage after completion.

Refinance loans

Maybe you already have a commercial mortgage, but your rates are too high. In that case, you want a refinance loan. You can refinance to get lower rates and lower monthly payments. With any luck, you’ll free up some cash flow for other projects.

Hard money loans

Hard money loans are short-term loans (think 6 to 24 months) with high interest rates. That makes them perfect for flipping properties, where you intend to offload your real estate quickly. You won’t find these at most banks or credit unions, though—you’ll have to get financing through private lenders.

Bridge loans

Bridge loans are a lot like a hard money loan, but the rates are slightly lower, and the terms are slightly longer (three years). As the name implies, bridge loans are great for bridging the time between buying land (or an existing property) and beginning construction (or remodeling), when you can refinance for a better deal through a construction loan.

Best Small-Business Loans
Lendio
Best overall
4.3 out of 5 stars
4.3
Fundbox
Best for low credit
3.6 out of 5 stars
3.6
Fundera
Best for SBA microloans
3.9 out of 5 stars
3.9
BlueVine
Best for larger loans
4 out of 5 stars
4.0
Funding Circle
Best for P2P lending
2.9 out of 5 stars
2.9
Learn more about our top brands.

Equity loans and lines of credit

If you already have equity in a building (yay for you!), then you might qualify for an equity loan or equity line of credit. Your property secures these types of loans (in other words, it serves as collateral), which you can then use for any working capital or purchasing needs you have.

SBA loans

SBA loans are a type of long-term financing backed by the U.S. Small Business Administration, or SBA. These loans have low interest rates and high maximum loan amounts, though you’ll have to meet some specific criteria to get them. Two types of SBA loans, SBA 7(a) and CDC/SBA 504 loans, can be used for real estate.

FAQs

Do I have to use a commercial real estate loan to buy a commercial property?

You don’t necessarily have to use real estate loans to buy property, but they’re probably your best bet. Commercial real estate loans come in much larger amounts than some other types of loans, and they offer payment structures that make sense for real estate projects. (For example, you can make interest-only payments during construction, then refinance your loan after the building is done.)

Plus, many lenders have restrictions on what their non–real estate loans can be used for, so in some cases, you’d get in trouble for buying an investment property with that line of credit.

If in doubt, ask your lender if your financing can go toward commercial property.

What kind of down payment do I have to make on a commercial mortgage?

The down payment on your commercial mortgage will depend on your specific lender and loan, but somewhere between 15% and 35% is typical for a commercial mortgage.

What fees and costs do commercial real estate loans have?

Real estate loans come with a lot of fees, unfortunately. Most commercial real estate loans have origination fees and appraisal fees at a minimum. You may also encounter loan application fees, survey fees, and other legal fees.

And watch out—some commercial loans have prepayment fees too.

What do I need to qualify for a commercial real estate loan?

Commercial lenders evaluate a prospective real estate borrower just like they would for any other loan: they’ll look at things like your personal credit score, your business’s credit score, your annual revenue, how long you’ve been around, and other stuff like that.

But it’s not just you and your business that has to qualify for the loan—the property does too. Most lenders will insist on getting an appraisal done to see if the purchase price is appropriate, and they may ask for inspections or surveys too. They may also consider the property’s location when deciding whether or not to lend.

(Maybe you can see why real estate loans usually take longer to fund than other small-business loans do.)

The takeaway

Commercial real estate lending has a lot in common with other types of small-business loans, but it’s not the same thing. Our list of favorite commercial lenders can guide you to loans designed just for your business real estate needs—whether that’s a long-term loan for purchasing property or a line of credit that draws on your equity.

Before you borrow, figure out the cost of your real estate loan with our commercial loan calculator.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Chloe Goodshore
Written by
Chloe Goodshore
Chloe covers business financing and loans for Business.org. She has worked with many small businesses over the past 10 years, from video game stores to law firms. Those years watching frustrated business owners try to sift through their many options gave her a passion for breaking down complex business topics. She wants to help business owners spend less time agonizing over their businesses so they can spend more time running them.
Recent Articles
Featured image of a female banker showing documents to a female client
Chase Small-Business Loans Review 2021
With little transparency or convenience to offer, Chase is far from our favorite small-business lender....
A young Asian businesswoman draws on a tablet while sitting in front of a desktop computer
9 Best Checking Accounts for Freelancers 2021
Best overall Lili Free sub-accounts No-fee checking Visit SiteLearn More Best interest-bearing BlueVine Interest-bearing checking...
Best Cannabis Dispensary POS 2021
Operating a cannabis dispensary is tricky because of legal regulations and restrictions. Our top picks...
The 9 Best Virtual and Outsourced Accounting Services for Small Businesses in 2021
We considered bookkeeping features, payroll and tax add-ons, integrations and software, and price to bring...