What Is a Commercial Loan?
A commercial loan is financing secured by income-producing property or used to fund business operations. Unlike residential mortgages, commercial loans are underwritten primarily on the property’s cash flow and the borrower’s business financials — not just personal income and credit score. Common types include commercial real estate mortgages, bridge loans, SBA loans, construction loans, and hard money loans.
What Credit Score Do I Need for a Commercial Loan?
It depends on the loan type. Conventional commercial mortgages typically require a 680+ FICO. SBA 7(a) loans prefer 650+. Hard money and asset-based loans from Commercial Loans of Texas can fund deals with scores as low as 500 — because we base approval on the property and equity, not your credit history alone. No-credit-check hard money options are available for investors with strong collateral.
How Much Can I Borrow?
Commercial loan amounts range from $200,000 to $50 million or more depending on the property value, LTV, and loan program. For commercial real estate mortgages, most lenders allow 65–80% LTV. Hard money caps at 65% LTV, and bridge is quoted on your deal. We’ll tell you your maximum loan amount after a quick review of the deal.
What Is the Minimum Down Payment?
Most commercial loans require 20–35% down. SBA 504 loans allow as little as 10% down for owner-occupied properties. Hard money requires at least 35% equity, since we cap at 65% LTV. If you’re refinancing, sufficient existing equity in the property can replace a down payment. Stated income loans often carry similar down payment requirements but have more flexible documentation rules.
What Is the Typical Interest Rate on a Commercial Loan?
Rates vary widely. Conventional commercial mortgage rates move with the market — call for today’s rate. Hard money prices above conventional. Bridge pricing sits between the two. SBA loans are tied to the prime rate plus a program-set spread. See our current Texas commercial loan rates page for up-to-date benchmarks.
How Long Does It Take to Close?
Conventional commercial loans typically close in 30–90 days due to appraisal and underwriting timelines. SBA loans often take 60–90 days. Bridge loans close in 2–4 weeks. Hard money loans can close in as little as 5–10 business days once we have the property info and a clear title. Speed depends on borrower response time and title complexity.
Do I Need a Business Entity to Get a Commercial Loan?
Not always — but it helps. Many commercial lenders prefer to lend to an LLC or corporation for liability reasons and ease of underwriting. Hard money and bridge lenders are especially comfortable with LLC borrowers. If you’re buying an investment property in your own name, we can still work with you. We’ll tell you the best structure for your specific deal.
What Documents Do I Need?
For conventional commercial loans: 2 years of tax returns (personal and business), 3 months of bank statements, rent roll (if income property), operating statements, and a property appraisal. For hard money and stated income loans: less documentation is required — often just a property package and proof of assets. We guide you through exactly what’s needed for your loan type.
Can I Get a Commercial Loan with Bad Credit?
Yes. Asset-based and hard money loans focus on the property value and equity — not your credit score. Bad credit commercial loans are available for investors who’ve had prior bankruptcies, foreclosures, or past credit issues, as long as the property and deal structure are solid. We’ve funded loans for borrowers with scores below 550.
What’s the Difference Between a Hard Money Loan and a Bank Loan?
Bank loans have lower rates but require strong credit, full documentation, and long underwriting timelines. Hard money loans are faster and more flexible but carry higher rates and shorter terms — typically 12–36 months. Most investors use hard money to acquire and stabilize a property, then refinance into conventional long-term financing once the asset is performing. See our full comparison: Hard Money vs. Bank Loans in Texas.
Ready to Apply?
Still have questions? We’re happy to answer them on a quick call. Apply online or contact Commercial Loans of Texas for a same-day response. We fund deals across Houston, Dallas, Austin, San Antonio, and throughout the state.