The 5 Best Commercial Real Estate Loans For 2023

Get Started With SmartBiz

Pros

Rates tend to be inexpensive
Long repayment terms
Excellent customer service
High borrowing amounts

Cons

Slow and laborious application process
Some additional fees

Why We Chose SmartBiz For Best Commercial Real Estate Loans

When it comes to real estate loans for small business, it’s hard to do better than the terms you’ll get from an SBA loan. And if you need help navigating the SBA loan process, you can’t do much better than SmartBiz, a company that specializes in speeding up and smoothing out the SBA loan application process.

SmartBiz Services

SmartBiz offers SBA commercial real estate loans up to $5 million with term lengths of 25 years.

SmartBiz Rates & Fees

Interest rates for SBA 504/CDC loans usually have rates slightly above the current prime rate. As of May 2023, this was between 5.71% and 5.72%. In addition to typical SBA closing costs, SmartBiz charges a 1% referral and packaging fee.

SmartBiz Eligibility Requirements

2 years in business
675+ credit score
Enough business revenue to support repayments

2. Lendio: Best Small Business Loan Marketplace

Lendio

Pros

High borrowing amounts
Low credit score requirements
Rates tend to be inexpensive
Long repayment terms

Cons

Application process can be slow
Funds can take awhile to disburse.

Why We Chose Lendio For Best Commercial Real Estate Loans

As a loan marketplace, Lendio allows businesses to apply to multiple lenders at once with a single application. This is a great time-saving option for business owners with limited time to spend on a loan application, or who want to compare multiple offers with a single application. When it comes to commercial real estate loans, just be aware that the application process won’t be as quick as it is with other forms of financing.

Lendio Services

Lendio offers commercial mortgages up to $5 million with terms of 20 to 25 years.

Lendio Rates & Fees

Lendio’s commercial real estate loans have interest rates between 4.5% and 6%.

SmartBiz Eligibility Requirements

6 months in business
600+ credit score
At least $8,000/month in revenue

Get Started With Lendio

3. Live Oak Bank: Best For USDA Loans

Live Oak Bank

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Get Started With Live Oak Bank

Pros

High borrowing amounts
Preferred SBA lender
USDA loans offered
Rates tend to be inexpensive

Cons

Borrower qualifications may be difficult to meet
Funds can take awhile to disburse

Why We Chose Live Oak Bank For Best Commercial Real Estate Loans

Live Oak Bank is a preferred SBA lender offering SBA 504 loans, which offers excellent terms for financing fixed assets like real estate. The preferred lender status allows Live Oak Bank to process SBA loans more quickly. In addition, Live Oak Bank offers USDA loans, which can be used for agricultural and rural real estate development.

Live Oak Bank Services

Live Oak Bank offers SBA 504 loans up to $15 million with terms of up to 25 years. Additional types of term loans, including USDA, are available in amounts up to $7.5 million with terms of up to 25 years.

Live Oak Rates & Fees

Current rates for SBA 504 loans run between 5.71% and 5.72%, with an additional fee of 0%-3.5% of the borrowed amount. The average rate for a USDA loan is currently around 6.691%.

Live Oak Bank Eligibility Requirements

3 years in business
680 credit score
Enough business revenue to service loan

4. Rapid Finance: Best For High-Risk Businesses

Rapid Finance

Get Started With Rapid Finance

Pros

Borrower qualifications are lower than banks
High borrowing amounts
Long repayment terms

Cons

Rates can be expensive

Why We Chose Rapid Finance For Best Commercial Real Estate Loans

Rapid Finance is online lender with a focus on funding businesses that may otherwise have a hard time accessing capital. To that end, Rapid Finance offers a wide variety of financing products, including commercial real estate loans, typically through one of its lending partners. As is often the case for real estate loans, be prepared for a less “rapid” funding process than you would otherwise get from this company.

Rapid Finance Services

Rapid offers real estate loans up to $2 million with terms of 5 to 25 years.

Rapid Finance Rates & Fees

Rapid Finance’s interest rates may vary depending on the origin of the real estate loan. Additionally, Rapid Finance may charge an origination fee of up to 2.5%.

Rapid Finance Eligibility Requirements

2 years of tax returns or financials
Schedule of debts

Get Started With ApplePie Capital

5. ApplePie Capital: Best For Franchisees

ApplePie Capital	Visit Site

Pros

Franchise specialists
Excellent customer service
High borrowing amounts

Cons

Only available to franchise businesses
Application process can be slow

Why We Chose ApplePie Capital For Best Commercial Real Estate Loans

Franchisees face a very specific set of challenges and demands when it comes to setting up their businesses, including acquiring real estate. To this end, ApplePie Capital offers access to SBA and other loans with long repayment times and high-borrowing amounts, as well as expertise in helping franchises get the funding they need.

ApplePie Capital Services

ApplePie Capital offers both SBA and conventional term loans from $100,000. Term lengths between 5 and 10 years are offered.

ApplePie Capital Rates & Fees

Interest rates vary depending on which of ApplePie Capital’s partners originate the loan. Origination and broker fees also vary by lender and loan type.

ApplePie Capital Eligibility Requirements

Must own a franchise business
Borrower qualifications may vary depending on franchise

Methodology: How We Chose Our Top Picks

When reviewing business financing products, Merchant Maverick compares data points from each lender. These include interest rates, term lengths, borrower requirements, and reputation. Lenders are then assigned an aggregate score.

For commercial real estate loans in particular, we more heavily weighted factors like the ability to purchase real estate with the product, the term lengths (as mortgages require longer repayment terms), and the interest rates offered by the lender. Unlike many other circumstances, real estate acquisition tends to specifically be the domain of term loans, so we didn’t give much consideration to the breadth of products. As the specific needs of any business can vary greatly, we encourage you to compare lenders beyond this list to get the best financing terms you can.

Understanding Commercial Real Estate Loans

A commercial real estate loan is a term loan, typically a mortgage or SBA loan, that is used to finance property. Commercial property is distinguished from residential property by its use to generate income. Commercial real estate loans will place a lien on the commercial property, which then serves as collateral. In comparison to residential mortgages, commercial real estate loans tend to have shorter repayment terms and lower loan-to-value ratios.

Commercial real estate loans typically range in term length from 3 to 25 years. Commercial real estate loan usages include construction, acquisition, and development of properties. Note that commercial real estate loans will often require the borrower to be an incorporate business entity rather than an individual or sole proprietorship/partnership.

How To Choose The Best Commercial Real Estate Loan

The best small business loans can vary from business to business as each has its own specific needs and circumstance. Commercial real estate loans are no different. However, there are some general guidelines you can apply when evaluating your loan repayment terms. Keep in mind the following factors:

The borrowing amount on offer
The term length (this should be high for commercial real estate loans)
The total cost of borrowing
Borrower requirements
Collateral requirements
The lender’s familiarity with your industry

Remember, it never hurts to get multiple offers to compare, as your application may look a lot better to one lender than another. With all this information in mind, you should be ready to take the next step toward getting the real estate financing you need.

FAQs: Commercial Real Estate Loans

How long are most commercial real estate loans?

Commercial real estate loan term lengths range between three to 25 years. In general, commercial real estate loans have slightly shorter term lengths than residential mortgages.

Do banks offer commercial real estate loans?

Many traditional banks do offer commercial real estate loans. However, the borrower qualifications and down payment requirements can be onerous for many small businesses. Banks do, however, typically offer better interest rates than you’ll get from an alternative lender.

What is a good interest rate for a commercial loan?

A good commercial real estate loan rate is somewhere between 5% and 7%. A decent metric is to compare your offer against the current interest rate for an SBA 504 loan.

Do commercial mortgages have higher interest rates?

While commercial mortgages have lower interest rates relative to other types of business loans, they are generally more expensive than comparable residential mortgages. This reflects the higher risk inherent in commercial development.

In Summary: 5 Best Commercial Real Estate Loans For 2023

SmartBiz:
- SBA loans, term loans, LOCs, & ERC refunds
- FICO: 675+
- APR: 5.71%+
Lendio:
- Commercial real estate loans, term loans, short-term loans, SBA loans, MCAs, LOCs, & equipment financing
- FICO: 600+ (for commercial real estate loans)
- APRs: 4.5%+
Live Oak Bank:
- Term loans, USDA loans, SBA loans
- FICO: 680+
- APR: 5.71%+
Rapid Finance:
- Commercial real estate loans, term loans, MCAs, LOCs, invoice factoring, SBA loans
- FICO: No minimum given
- APR: Varies by lender
ApplePie Capital:
- Term loans, SBA loans, equipment financing
- FICO: Varies by franchise
- APR: Varies by lender

Bio
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Chris Motola

Expert Analyst & Reviewer at Merchant Maverick

Chris has been writing about small business topics since 2003. In 2015, he joined Merchant Maverick, where he writes about business financing, payment processing, and demographic trends in entrepreneurship. Chris has been featured in Fox Business, ABC News, Yahoo Finance, GoBankingRates, Newsweek, BizJournals, and other publications. He has a Bachelor’s of Arts in English Writing Arts from SUNY Oswego, and a Masters of Science in Interactive Media from the University of Central Florida. He currently resides in the Hudson Valley region of New York.

View Chris Motola's professional experience on LinkedIn.

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1. SmartBiz

❮ ❯

SBA loans, term loans, LOCs, & ERC refunds
FICO: 675+
APR: 5.71%+

2. Lendio

❮ ❯

Commercial real estate loans, term loans, short-term loans, SBA loans, MCAs, LOCs, & equipment financing
FICO: 600+ (for commercial real estate loans)
APRs: 4.5%+

3. Live Oak Bank

❮ ❯

Term loans, USDA loans, SBA loans
FICO: 680+
APR: 5.71%+

Visit Site

4. Rapid Finance

❮ ❯

Commercial real estate loans, term loans, MCAs, LOCs, invoice factoring, SBA loans
FICO: No minimum given
APR: Varies by lender

5. ApplePie Capital

❮ ❯

Term loans, SBA loans, equipment financing
FICO: Varies by franchise
APR: Varies by lender

Visit Site