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You found the property. Maybe it's a retail spot on a high-traffic corner, an industrial building two blocks from the highway, or a mixed-use parcel that will be a boon if you can move fast. Now you need money, but which loan, which lender, what timeline, what loan terms, what interest rates, and which path won't kill the deal at underwriting?
Here, I'll walk you through how commercial real estate (CRE) financing actually works in 2026. That includes where Clarify Capital fits (and where we don't), how our loans stack up against each other for property buyers, the financing categories worth knowing (even if Clarify doesn't originate them), and what lenders look at when you apply. You'll find out which loans work for which deals, what each one actually costs, and how to skip a few common mistakes I see operators make at the closing table.
What Clarify Can (and Can't) Finance for Your CRE Deal
Most commercial real estate (CRE) deals are either owner-occupied (you'll operate your business out of the building) or investment-only (you're buying it to rent, lease, or flip). The lender pool looks different depending on which side of that line you're on.
Clarify works with owner-occupied buyers, plus the surrounding capital you need for a CRE purchase. The type of loan that fits depends on the deal. We arrange U.S. Small Business Administration (SBA) loans up to $5 million for buying a property your business will use, including commercial property loans for offices, retail, and light industrial. We also write the working-capital loans (lines of credit, short-term business loans) and home equity lines of credit (HELOCs) that often fill the gaps around a CRE transaction, including closing costs, fit-out, renovation, and the timing gap between deals.
Clarify moves fast on every loan inside that scope. Annual percentage rates (APRs) start at 6%, and funding can land as fast as same-day.
We don't write conventional commercial mortgages for non-owner-occupied investor deals. Those come from banks, credit unions, and specialized CRE lenders. The same goes for bridge loans, hard money, and construction loans for ground-up builds. I'll cover those later as concepts worth understanding, even if Clarify isn't your originator.
| Commercial Real Estate Financing Options With Clarify Capital | ||||
|---|---|---|---|---|
| SBA loans | HELOC | Short-term business loan | Business line of credit | |
| Loan amount | Up to $5,000,000 | Up to $75,000 against home equity | $10,000 to $5,000,000 | Up to $5,000,000 |
| Funding speed | Typically 2 weeks to 90 days | As fast as 1 week | As fast as same-day | As fast as same-day |
| Rate | APR starting at 6.75% | APR as low as prime | APR starting at 6% | APR starting at 6% |
| Repayment terms | 10 to 25 years, monthly payments | Up to 30 years; draw period up to 5 years | 6 to 36 months; weekly, biweekly, or monthly | Revolving; 6 to 36 months on what you draw |
| Qualification floor | 640+ credit, 2 years in business, consistent revenue, full financials | 620+ credit, sufficient home equity, income verification | 550+ credit, 6 months in business, $10,000+ monthly revenue | 600+ credit, 12 months in business, $10,000+ monthly revenue |
| Collateral | Sometimes required, depending on loan size and program | Qualifying home (1 to 4 units) secures the line | Not required (revenue-based) | Not required (revenue-based) |
| Best fit | Owner-occupied property purchase | Funding a down payment using existing home equity | Renovations, fit-out, closing-cost gap | Ongoing working capital tied to a property |
Find the Right CRE Financing With Clarify
We can usually tell you whether one of our loans fits your deal in a few hours. Apply online in two minutes; same-day funding is available on our working-capital products.
- Loan amounts up to $5M
- APRs starting at 6%
- Funding available same day
- 50,000+ businesses funded
It won't hurt your credit.
SBA Loans for Owner-Occupied Commercial Property
The SBA 7(a) and SBA 504 loan programs (backed by the Small Business Administration) are how most small businesses buy the building they operate out of. Both programs can also fund ground-up construction or major expansion of an owner-occupied property, which is worth knowing if you're building rather than buying. The occupancy threshold is 51% for an existing building and 60% for new construction (with the requirement to reach 80% occupancy within 10 years).
With Clarify, you can borrow up to $5 million as a borrower on either program, with fixed-rate options and APRs starting at 6.75%, paid back over 10 to 25 years. The qualification floor is consistent revenue and the ability to demonstrate you can service the debt: a credit score of 640 or higher, tax returns, financial statements, bank statements, and a business credit history that supports credit approval.
The trade-off is timing. SBA loan approval feels a bit like passport renewal: They'll get to you, but on government time. Funding typically lands in two weeks at the fast end, 30 to 90 days at the slow end. If you're competing on a deal that needs to close in three weeks, an SBA loan probably isn't your path.
HELOC for Funding a CRE Down Payment
A HELOC gives you access to capital backed by the equity in your primary residence. With Clarify, that's a revolving credit line up to $75,000, available as fast as one week, with rates as low as prime. Repayment runs up to 30 years with a draw period of up to five years.
I see operators reach for a HELOC when the rest of their financing stack is together, but they're short on the cash down payment that a conventional CRE mortgage or SBA partner expects. It's also a flexible source for renovation cash you can draw against as needed.
Just remember, you're putting your home on the line. If the deal goes sideways, the lender's collateral is your house. It's generally not a good idea to use a HELOC for a CRE deal you wouldn't sign your own mortgage payment on personally.
Short-Term Business Loans for Renovations and Gap Financing
A short-term business loan is the working-capital tool for the smaller line items related to a CRE deal: a renovation, equipment for the fit-out, paying contractors before tenants start rent, covering closing costs that came in higher than budget.
With Clarify, that's $10,000 up to $5 million, APRs starting at 6%, repaid over six to 36 months. Funding can land as fast as same-day for businesses with credit scores over 550. The qualification floor is $10,000 in monthly revenue and six months in business.
It's not a substitute for a mortgage; that's not what it's for. But for the line items the mortgage doesn't cover, this is the best path.
Business Lines of Credit for Property-Related Working Capital
A business line of credit gives you up to $5 million in revolving credit you can draw against as needed. You pay interest only on what you use. APRs start at 6%; repayment runs six to 36 months on what you draw.
For CRE owners, the value is ongoing flexibility. Say a vacancy stretches longer than expected, a tenant improvement (TI) allowance comes due, or an HVAC system fails the week before a lease renewal. You draw against the line of credit, pay it back when cash flow recovers, then the credit refills (much like a credit card).
The qualification floor is a 600+ credit score, 12 months in business, and $10,000+ monthly revenue. Underwriting is revenue-based: we look at bank statements, not collateral.
Property Types and Financing Fit
Different property types attract different lenders, and the rules vary by occupancy.
| Property type | Primary Clarify acquisition path | Supporting Clarify financing | Things to note |
|---|---|---|---|
| Office buildings | SBA 504 for owner-occupied office (you'll occupy 51% or more) | HELOC for the down payment, short-term business loan for fit-out and tenant improvements, business line of credit for ongoing working capital around the property | Investor-bought office, or investment properties in general, sit with conventional CRE banks. Post-2023, banks scrutinize office vacancy and lease-rollover risk closely. |
| Retail properties | SBA 504 for owner-occupied storefronts (51%+ occupancy) | HELOC for down payment cash, short-term business loan for storefront fit-out and inventory ramp, business line of credit for seasonal cash flow | Multi-tenant retail centers held as investments fit conventional commercial mortgages from banks, not Clarify. |
| Industrial and warehouse | SBA 504 for owner-occupied warehouses and light manufacturing | Equipment financing for forklifts, racking, conveyors, and other industrial equipment; short-term business loan or line of credit for operational ramp and working capital | Industrial has been the strongest CRE sector for several years, so banks compete for these deals, and rates are tighter. For larger industrial deals or warehouse portfolios (loans north of $10 million), go to banks or private credit funds. |
| Mixed-use developments | SBA 504 sized against the commercial portion (the business must occupy at least 51% of the building's total rentable square footage, or 60% for new construction) | HELOC or short-term business loan for the gap between commercial-only SBA sizing and total project cost; business line of credit for working capital after move-in | Most ground-up mixed-use construction needs a construction loan from a bank or specialty lender. Multifamily-only or investor-driven mixed-use sits with conventional CRE banks. To model the cash flows before you commit, our commercial real estate loan calculator is a good starting point. |
I worked with a sporting goods operator who wanted to buy out a small retail property they'd been leasing for years. They tried a conventional mortgage first, ran into a low loan-to-value (LTV) cap, then came to us for an SBA 7(a). The SBA's higher allowable LTV did the heavy lifting, and they closed inside their landlord's deadline.
Other CRE Financing Categories
Even if Clarify doesn't write these, you might bump into them in CRE deals. Here's a quick orientation so you know which lender to call when a deal needs one of them. Bridge loans, in particular, are the financial equivalent of an Uber after a missed flight: more expensive than the alternative, but you need a lift ASAP, no matter what.
| Category | What it is | Typical lender | When to reach for it |
|---|---|---|---|
| Conventional commercial mortgages | Long-term commercial mortgage loans for income-producing CRE. Underwriting leans heavily on the property's net operating income (NOI), debt service coverage, and your overall sponsor financials. | Commercial banking divisions of banks, credit unions, and other financial institutions | Non-owner-occupied investor deals: multifamily of 5 or more units, retail centers, office, hotel. |
| Conventional CRE construction loans | Loans funded in draws as construction progresses. You pay interest only on what's been drawn; at stabilization, you refinance into permanent financing. SBA 7(a) and 504 (covered above) can fund construction of an owner-occupied building, so this is the path for non-owner-occupied builds or projects larger than SBA caps. | Banks, specialty construction lenders | Ground-up builds and major redevelopment of non-owner-occupied CRE, or any build that exceeds SBA loan limits. |
| Bridge loans | Short-term commercial financing that bridges the gap until permanent financing closes, typically 6 months to 3 years (often 12 to 24 months) at interest rates of 6% to 12% or higher. | Specialized CRE lenders | Value-add acquisitions where you'll stabilize the property and refinance, or a 1031 exchange running up against the IRS clock. |
| Hard money | Short-term loans secured by real property, typically 6 to 18 months at 10% to 18% rates, approved on the property's value (not the borrower's credit). | Private lenders | Real estate investors and flippers who need speed and accept the higher cost. Loans on raw or unimproved parcels fall in a similar specialty category. See our guide to land loans for that path. |
How Lenders Evaluate Your Application
Underwriting looks different depending on which side of the lender market you're on.
A bank or SBA-partner lender will run a full doc evaluation in line with traditional commercial lending standards. That's tax returns, financial statements, business plans, property appraisal, LTV calculation, debt service coverage ratio (DSCR) projection, personal credit pull, creditworthiness review, and personal guarantees from the principals. The conversation is detail-heavy, and the timeline reflects that. Origination fees, prepayment penalties, and balloon payment structures (a low monthly payment with the principal due at the end of a shorter term) are all common, so read the term sheet carefully.
Our checklist on SBA loan requirements shows what an SBA-partner lender will ask for in detail.
Clarify's working-capital loans are underwritten differently. We're revenue-based, not collateral-based, so the core question is whether your business cash flow supports the loan payment. We don't require collateral on our working-capital products. Some loans carry an origination fee. The application takes about two minutes, and same-day funding is possible for credit scores over 550.
Minimum Qualifications
$10,000 in monthly revenue
Your business must earn at least $10K per month in a business bank account.
500+ credit score
You can get approved with any credit score. But the better your credit rating, the better interest rates lenders offer. Your FICO score should be above 500.
Minimum six months in business
Your company should be operational for a minimum of six months. This shows business lenders that your company is sustainable and won't go out of business.
Have a business bank account
Your Clarify advisor will need three or four months of your most recent bank statements to verify income. This is just to see you're actually making $10K+ month in revenue.
Refinancing Your CRE Loan
Refinancing comes up for three reasons most often:
Rates dropped
You want to pull equity out (cash-out refi)
Your existing loan has a balloon payment coming due
Rate-and-term refis lower your monthly payment or shorten the amortization period. Cash-out refis convert built-up equity into cash you can deploy elsewhere, often into another acquisition. Balloon-payment refis are the rescue play, where your original loan amortizes over a long schedule but matures sooner, and you refinance into a new permanent loan before the balloon hits.
Watch the cost. Closing costs, prepayment penalties, and origination fees can eat into the rate savings on a marginal refi. Run the breakeven math: How many months until the new payment savings exceed the cost of the refinance? If you can't make it past month 36 and you might sell in three years, hold the original loan.
A few years back, I helped a trucking operator who'd been carrying a balloon-payment commercial mortgage (a loan with low monthly payments followed by one large lump-sum payment at the end of the term) for five years on their dispatch yard. They came to us 90 days before the balloon hit, panicking. We routed them into an SBA 7(a) refi, locked their payment for the next 20 years, and they freed up working capital, which they redeployed into a second yard the next year.
Your Next Step
A good CRE financing decision usually comes down to two things: matching the loan to the deal type (owner-occupied vs. investor) and matching the lender to the timeline. SBA financing is hard to beat for owner-occupied deals where you have time to underwrite carefully. HELOCs, short-term business loans, and lines of credit handle the smaller adjacent capital around a CRE transaction. The right combination depends on your specific business needs.
If you're working on a deal right now, we can usually tell you within a few hours whether one of our loans fits. Apply with Clarify Capital to get a read on your options.
Frequently Asked Questions (FAQs)
Below, I cover the questions I hear most often from business owners who are first sizing up their CRE financing options.
How Does Commercial Real Estate Financing Work?
Commercial real estate financing works on the same basic principle as residential financing. You borrow money to buy property, you pay it back with interest, and the property typically serves as collateral. The difference is that underwriting weighs the property's income generation more heavily than your personal income. Loans are usually shorter than residential mortgages, and down payments vary by program. The SBA 504 program requires a 10% borrower contribution. Conventional commercial mortgages from banks typically require more. Rates and structure depend on the property type, your business financials, and which lender you choose.
Do You Have To Put 20% Down on a Commercial Loan?
Not always. The standard SBA 504 program structure has the borrower contributing 10%, the SBA's Certified Development Company (CDC) partner covering 40%, and a third-party lender financing the remaining 50%. SBA 7(a) loans can be structured at higher LTVs depending on the partner lender's underwriting. Conventional commercial mortgages from banks generally require a higher down payment than SBA financing, with the specific figure depending on property type, your business financials, and the lender. Investor properties carry higher down-payment requirements than owner-occupied.
What Is the Best Way To Finance a Commercial Property?
The best loan depends on whether the property is owner-occupied or investment, your timeline, and your down-payment capacity. For owner-occupied small business CRE under $5 million with time to underwrite, SBA 504 is hard to beat. For non-owner-occupied investor properties, conventional commercial mortgages from banks are the standard. For fast-closing deals or value-add plays, bridge loans or hard money may make sense even at higher rates. For adjacent capital (fit-out, renovation, closing-cost gap), a short-term business loan or business line of credit can complement the primary mortgage.
What Is the 2% Rule in Commercial Real Estate?
The 2% rule is a quick screening test (used mostly in residential investment but referenced in smaller CRE) where the monthly gross rent should equal at least 2% of the property's purchase price. So a $300,000 property should produce $6,000 or more in monthly rent to pass. Most U.S. markets don't clear it post-2020; values have outrun rents. It's more useful as a contrarian filter (if a property easily clears 2%, dig into why) than a hard buying rule.
Bryan Gerson
Co-founder, Clarify
Bryan has personally arranged over $900 million in funding for businesses across trucking, restaurants, retail, construction, and healthcare. Since graduating from the University of Arizona in 2011, Bryan has spent his entire career in alternative finance, helping business owners secure capital when traditional banks turn them away. He specializes in bad credit funding, no doc lending, invoice factoring, and working capital solutions. More about the Clarify team →
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