Conventional Commercial Loans
Fast Close | All Property Types | No SBA Rules

A conventional commercial loan is financing from banks, credit unions, or private lenders without government backing (like SBA). These loans offer more flexibility, faster closing, and work for investment properties that don't meet SBA owner-occupancy requirements. Trade-offs include higher down payments (25-35% vs 10%) and potentially higher rates than government-backed options.

Key requirements include: 25-35% down payment, minimum credit score of 680+ (700+ for best rates), debt service coverage ratio (DSCR) of 1.20-1.25+, global cash flow analysis for borrower, 6-12 months reserves, and property appraisal meeting loan standards. Requirements vary by property type and lender.

Conventional commercial loans finance: office buildings, retail centers and single-tenant NNN, industrial and warehouse, multi-family (5+ units), self-storage facilities, mixed-use properties, hotels and hospitality, medical and professional offices, and special-purpose properties. Each property type may have different LTV limits and rate adjustments.

Conventional commercial rates in 2026 typically range from 7-9% (rates subject to change), depending on property type, loan term, borrower strength, and market conditions. Fixed rates for 5-10 year terms are common, with balloon payments or refinancing at maturity. Some lenders offer 25-year full amortization. Rates are generally higher than residential or SBA loans.

Choose conventional if: you need faster closing (30-45 vs 60-120 days), property is investment (non-owner-occupied), you have 25%+ down payment, you want fewer restrictions. Choose SBA if: you want lower down payment (10%), you'll occupy 51%+, you can wait longer to close, you qualify for below-market SBA 504 fixed rates.

DSCR (Debt Service Coverage Ratio) measures if the property's income covers the loan payment. Calculate: Net Operating Income ÷ Annual Debt Service. Most conventional commercial lenders require 1.20-1.25+ DSCR, meaning the property generates 20-25% more income than the loan payment. Higher DSCR = better terms.

Yes! Unlike SBA loans, conventional commercial loans don't require owner-occupancy. You can finance pure investment properties including NNN leases, multi-family rentals, and commercial buildings with third-party tenants. For smaller investment properties (1-4 units), DSCR loans may offer better terms.

Conventional commercial loans typically close in 30-45 days, significantly faster than SBA loans (60-120 days). Timeline depends on: appraisal timing (2-3 weeks for commercial), title and environmental work, borrower document responsiveness, and property complexity. Having documents ready can expedite closing.