Commercial Lending Guide
Use this guide to understand how commercial lenders evaluate deals, which products fit different business plans, and how to assemble a complete loan package.
Major commercial loan types
Commercial lending spans permanent mortgages, bridge loans, construction facilities, agency multifamily debt, DSCR investor loans, and SBA programs for owner-occupied real estate. Each product balances speed, leverage, documentation, and cost of capital differently.
Start by clarifying hold period and asset condition. Stabilized cash-flowing properties lean toward permanent debt; transitional assets often need bridge or construction capital first.
- Permanent / commercial mortgage: longer term, amortizing, covenant-driven
- Bridge: short-term, flexible, higher cost, exit-focused
- Construction: draws, inspections, completion risk
- DSCR: property income primary qualification
- SBA: owner-occupied small business real estate
Core underwriting metrics
Lenders commonly test loan-to-value (LTV), debt service coverage ratio (DSCR), and debt yield. These metrics protect against over-leverage if rents soften or rates rise.
Sponsors should stress-test NOI with higher vacancy and expenses, then confirm the loan still clears lender hurdles.
Documentation checklist
A complete package accelerates review. Include an executive summary, sources and uses, rent roll, T-12 operating statement, borrower résumé, liquidity evidence, and entity documents.
- Purchase contract or refinance payoff statement
- Trailing-twelve financials and YTD interim
- Rent roll with lease expirations
- CapEx budget and photos for value-add
- Personal financial statement and liquidity
Next steps
Model payments with our calculators, review program pages for fit, then submit an inquiry so lending partners can respond with preliminary terms.
Educational content only. Not legal, tax, or lending advice. Not a loan offer.
