Purchasing real estate, renovating your current property or refinancing real estate debt can be a smart way to grow your small business. Online lenders offer solid alternatives to traditional banks for commercial real estate loans due to looser requirements and faster time to funding. You may, however, pay a bit more for that speed and convenience.
Before shopping for small-business loans, it’s a good idea to estimate the profit from your real estate purchase or renovation or the savings from a refinance to ensure it’s more than the cost of the loan. Always weigh the terms, interest, fees and speed of funding carefully before making a decision.
Our pick for
Purchases or refinancing
$5k - $5M
5 - 25 years
Starting at 5.5%
As fast as 2 weeks
Our pick for
12.18 - 36.00%
A Small Business Administration loan is your best bet if you’re an established and profitable business looking for the lowest borrowing costs.
You can get an SBA 7(a) commercial real estate loan up to $5 million. You can use the proceeds to purchase real estate or refinance existing real estate debt.
With a 25-year repayment term and relatively low APRs, you’ll have a lower monthly payment than with regular business loans.
Generally speaking, to qualify for an SBA loan, you'll need a good personal credit score, at least two years in business and strong annual revenue. You also need to meet the SBA’s eligibility requirements. Additionally, to qualify for an SBA commercial real estate loan, a minimum 51% of the property you purchase must be occupied by and used by your business.
Based on its appraised value, you must have at least 10% to 20% equity in the real estate for a refinance or put down 10% to 20% for a real estate purchase.
Funding Circle provides loans up to $500,000, with repayment terms up to five years. You need at least two years of business history to qualify, as well as a minimum 660 credit score. There are no minimum revenue requirements, although typical borrowers have annual revenue of about $2 million.
If you’re looking for other financing, NerdWallet has a comparison tool featuring the best small-business loans to meet your needs and goals. We gauged lender trustworthiness, market scope and user experience, along with other factors, and arranged them by categories that include your revenue and how long you’ve been in business.