Best Commercial Real Estate Loans and Mortgages for Small Businesses

Whether you’re looking to buy a new building or remodel an existing facility for your business, you’ll likely need to take a loan to cover these costs. We researched over several dozen lenders and loan programs and gathered the best commercial real estate loan and mortgages on the market for small business owners.

Best Commercial Real Estate Loans for Bad Credit

Getting a real estate loan can be difficult if you have a low credit score. You may want to consider a commercial mortgage company that focuses on borrowers with low credit scores. Alternative lenders aren’t usually an option for real estate loans, as many don’t allow their loans to be used to purchase real estate (SnapCap is one exception). They can, however, be a good option for renovating existing property. Regardless of what you decide, bear in mind that rates and terms will be less favorable as consequence of having a low credit score.


If you’re looking to purchase real estate, but have a lower credit score, SnapCap is one good option for getting funding. Through SnapCap, you can borrow up to $600,000 for three to 24 months to purchase or renovate real estate. SnapCap is one of the few alternative lenders that allows you to purchase real estate with its loans. While APRs are on the higher side at 20% to 50% or more, you will only need a minimum credit score of 550 to apply (other requirements apply, such as being in business at least 9 months with at least five bank deposits per month). You will also be required to personally guarantee the loan. Another benefit of using SnapCap is that you can typically get funds within one to two days after being approved for a loan.

  • 19.99% - 49.99% APRs (may be higher)
  • Loan terms of 3 to 36 months
  • Funds in as fast as 2 days
  • Loans up to $600,000
  • Lenient eligibility requirements


If you’re looking to renovate existing property, OnDeck is a great source of funding for borrowers with fair to average credit scores. While you can’t purchase real estate with an OnDeck loan, you can borrow up to $500,000 for any renovation or remodeling needs. Qualifying is also simple: you’ll need a credit score of 500 and your business must be at least one year old with $100,000 in annual revenue. Average APRs for loans were approximately 45% in 2015, and while this higher than other alternative or traditional lenders, OnDeck has relatively few requirements to qualify and provides funds within one to two days. If you are planning on taking out multiple loans, OnDeck is a sound choice as repeat borrowers can also benefit from reduced service fees.

  • 9.3% - 99.7% APRs (may be higher)
  • Loan terms of 3 to 36 months
  • Funds in as fast as 1 day
  • Loans up to $500,000
  • Lenient eligibility requirements


Credibly is another superior choice for funding if you have a lower credit score. There are no credit score, personal guarantee or collateral requirements to qualify, making Credibly one of the few solutions available to borrowers with credit scores below 500. As with OnDeck, you cannot use a Credibly loan to purchase real estate, but you can use it to renovate and remodel any buildings you already own.

You can borrow up to $250,000 through a business expansion loan, with terms ranging from 18 to 24 months. APRs are typically between 10% and 36%, though they may be higher if your credit score is very low. Like the other lenders in this list, Credibly can fund a loan in as quickly as two days after approval. Payments are automatically deducted from your business’s bank account every week, so repayment is hassle-free and convenient.

  • 9.99% - 36% APRs (may be higher)
  • Loan terms of 18 to 24 months
  • Funds in as fast as 2 days
  • Loans up to $250,000
  • Lenient eligibility requirements

Getting a Commercial Real Estate Loan with Bad Credit

To maximize your chances of securing funding, you should have a strong business plan/pitch. A good business plan will clearly detail why you need funding and how you plan to use it. There are many organizations, such as your city’s local business associations and SCORE, that offer free or paid business plan preparation services. You’ll also need to show you’re actively repairing your credit. This means catching up on late payments, paying down debt or renegotiating your repayment plan. Improving your credit score will take time, but lenders will appreciate that you’re taking steps in the right direction. When speaking to lenders, you should clearly demonstrate how you’ve turned your finances around.

You should be prepared to shop around to find lenders that are willing to listen to your pitch. If you find a willing lender, you may still be able to secure a bank or SBA loan (thanks to the collateral provided by the real estate and the guarantee provided by the SBA). You may also want to consider a commercial mortgage company as some specialize in providing bad credit loans. As a last resort, look into bridge, hard money, private or subprime loans. These loans come with less than ideal terms, but you’ll still be able to qualify if you have a low credit score.

Best Commercial Real Estate Loan for Good Credit: SBA CDC/504 Loan

For commercial real estate financing, you likely won’t find better rates outside of a 504 loan. Through this program, the SBA offers loans for purchasing land or buildings, making lot improvements, constructing or remodeling facilities and purchasing long-term machinery. 504 loans are actually two loans: a bank loan for 50% or more of the loan amount and a loan from a Certified Development Corporation (CDC) for up to 40% (with a maximum of $5.5 million). You’ll need to put down at least 10% as a borrower, which is lower than what a bank loan requires.

Current interest rates on the CDC loan are below market rates at 4% to 5%. Interest rates on the bank loan are usually low too, as the loan is collateralized by the real estate or machinery purchased. 504 loans are available in 20-year terms for real estate (10-year terms for equipment). Existing and new businesses are eligible to apply, making 504 loans an attractive option for startups. Because the loan is backed by the SBA, you may be able to qualify even if you don’t have great credit. You’ll need to apply for a 504 loan through a bank or credit union.

  • ~4% interest rates
  • Terms of 10 or 20 years
  • Several weeks to fund
  • Loans up to several million
  • Strict eligibility requirements

Best Commercial Real Estate Loan for Investment Properties: Bank Loans

While 504 loans are a great option, they are only available for businesses that plan to occupy the spaces they buy (referred to as “owner occupied commercial real estate”). If you’re looking to buy a commercial investment property, then you should consider a loan from a bank or credit union, as they will offer low interest rates and large loan amounts. National and regional banks and credit unions such as Wells Fargo, U.S. Bank, PNC Bank and Navy Federal Credit Union offer specific loans for investment real estate.

Rates and terms will vary by bank, but interest rates may be lower than average since the loans are secured by real estate. Many banks will offer borrowers the choice between fixed or variable interest rates, with average terms from five to 25 years. Borrowers will be required to make a down payment, frequently 20% or more of the property’s value.

  • Interest rates vary
  • Terms from 5 to 25+ years
  • Several weeks to fund
  • Loan up to a several million
  • Strict eligibility requirements

Best Commercial Real Estate Loan for Quick Renovations: Fundation

If you need funds quickly to renovate or remodel, you should consider Fundation, as the lender can fund loans within one to three business days and provides reasonable APRs, especially compared to other alternative lenders. Fundation provides term loans up to $500,000 that can be used for renovation or remodeling of existing facilities (they cannot be used to purchase real estate).

Terms range from one to four years, with APRs between 7.99% and 24.99%. To qualify, you’ll need to be in business at least two years with annual revenue of $200,0000 and at least three employees. Loans under $75,000 require a minimum credit score of 620 and loans over $75,000 require 640. Loans also require a personal guarantee from the business owner. You’re required to make payments twice a month, which may be easier than making one large lump-sum payment monthly.

  • 9.99% - 36% APRs (may be higher)
  • Loan terms of 18 to 24 months
  • Funds in as fast as 2 days
  • Loans up to $500,000
  • Stricter eligibility requirements

Summary of Best Commercial Real Estate Loans

In the table, we’ve summarized our findings of the best commercial real estate loans and mortgages to help borrowers make a quick comparison.

Best for...Lender/LoanRates
Borrowers with low credit scores
  • SnapCap
  • OnDeck
  • Credibly
  • Vary
  • 9.3% - 99.7%
  • 9.99% - 36%
Purchasing real estateSBA 504 Loan~4%
Purchasing investment propertyBank loanVary
Quick renovationsFundation7.99% - 29.99%

What to Consider When Getting a Commercial Real Estate Loan or Mortgage

Purchasing real estate for your business is likely one of the largest and most important expenses you’ll make as a small business owner. Getting the right space for your business to grow and expand is important for long-term, sustained success. In order to get the best loan, you should shop around. Get a few loan offers from several banks and compare the terms and the fine print of the contracts. Factors to consider include the interest rate/APR and whether it’s fixed or variable (and if it’s variable, when it can be adjusted and whether you think rates will go up or down), the repayment schedule and amounts and the total estimated repayment amount. You should also consider different types of loans like SBA loans, traditional commercial mortgages, conduit loans or life insurance loans.

You should also be looking for any stipulations from the lender, such as whether you’ll be required to have or pay for inspections, personally guarantee the loan (or have your spouse personally guarantee) or have a general lien on business assets, and you should know what conditions will void the loan contract (i.e., damage to the land or property, environmental or chemical disasters, etc.). It’s a good idea to have a lawyer or legal advisor look over the contract to see any potential red flags or points that can be negotiated.

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