Best of
Commercial Real Estate Loans: Compare Best Options
At NerdWallet, we strive to help you make financial decisions with confidence. To do this, many or all of the products featured here are from our partners. However, this doesn’t influence our evaluations. Our opinions are our own.
Our pick for
Purchases or refinancing
SmartBiz - SBA loan
Est. APR
9.28 - 10.52%
Min. Credit Score
650
Pros
- Competitive rates among online lenders.
- Faster than getting an SBA loan from a bank.
Cons
- Must have strong financials, supported by personal and business tax returns for the past 3 years.
- Stringent rules on use of proceeds.
- Requires business lien and personal guarantee.
Qualifications
- Minimum credit score: 650.
- Minimum time in business: 2 years.
- Minimum annual revenue: $50,000.
- No bankruptcies or foreclosures in the past 3 years.
Our pick for
Business renovations
Funding Circle - Online term loan
Est. APR
12.18 - 36.00%
Min. Credit Score
660
Pros
- Cash can be available within 3 business days.
- Competitive rates among online lenders.
- No minimum revenue requirement.
Cons
- Requires business lien and personal guarantee.
Qualifications
- Minimum credit score: 660.
- Minimum time in business: 2 years.
- Minimum annual revenue: None.
- No bankruptices in the past 7 years.
Summary of Commercial Real Estate Loans: Compare Best Options
| Lender | Best For | Est. APR | Min. Credit Score |
|---|---|---|---|
SmartBiz - SBA loan | Purchases or refinancing | 9.28 - 10.52% | 650 |
Funding Circle - Online term loan | Business renovations | 12.18 - 36.00% | 660 |
Real estate loans for purchases or refinancing
SmartBiz is your best bet if you’re an established and profitable business looking for the lowest borrowing costs.
The company provides Small Business Administration 7(a) commercial real estate loans ranging from $500,000 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.
To qualify, you need a personal credit score starting at 675, at least three years in business and $250,000 or more in annual revenue. In addition, a minimum 51% of the property you purchase must be occupied by and used by your business. You also need to meet the SBA’s eligibility requirements.
A first lien on the real estate is required. 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. For SmartBiz’s no down-payment plan (called rent replacement option), the monthly loan payment cannot exceed your current monthly lease expense.
Real estate loans for renovations
Funding Circle provides loans up to $500,000, repaid over a period of six months to five years. You need at least two years of business history to qualify, as well as a minimum 620 credit score. There are no minimum revenue requirements, although typical borrowers have annual revenue of about $2 million.
Compare small-business loans
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.
Last updated on November 21, 2019
To recap our selections...
NerdWallet's Commercial Real Estate Loans: Compare Best Options
- SmartBiz - SBA loan: Best for Purchases or refinancing
- Funding Circle - Online term loan: Best for Business renovations
