Conventional Commercial Real Estate Loans
Conventional commercial loans are bank-funded financing products that do not carry an SBA government guarantee. For many borrowers, particularly experienced investors, those acquiring larger properties, or those seeking investment real estate, conventional financing is the right tool. At Commercial Capital Partners, we source conventional commercial loans through a network of banks, credit unions, and private capital sources across the country.
Conventional loans offer flexibility that SBA programs cannot always provide: higher loan amounts, broader property types, faster closings, and options for investment properties where the borrower does not occupy the building.
When Conventional Financing Makes Sense
Investment properties. SBA loans require the borrower to occupy the property. Conventional financing is the appropriate route for rental properties, investment portfolios, and buildings where tenants provide the income.
Loan amounts above $10 million. SBA programs cap at $10M. Conventional loans have no set ceiling and are the primary vehicle for larger commercial acquisitions.
Faster timelines. Without the SBA approval process, conventional loans can close in as few as 30 days for clean transactions, a meaningful advantage in competitive markets.
30-year amortization. Some conventional lenders offer 30-year fully amortizing terms, reducing monthly payment obligations compared to shorter SBA structures.
Typical Terms
Down payment: 20–35% depending on property type and occupancy. Amortization: 20–30 years. Interest rate: fixed or adjustable, market-based. Loan-to-value: 65–75% for investment properties. Closing timeline: 30–60 days for stabilized assets
Recent Conventional Closings
$3,250,000. Industrial property refinance, Ontario, CA , $2,750,000. Hotel refinance, West Covina, CA , $2,500,000. Retail strip purchase, San Bernardino, CA , $850,000. Retail property refinance, Jurupa Valley, CA
To discuss conventional financing for your next acquisition or refinance, call (909) 721-5915. We serve the Inland Empire, Los Angeles, and clients nationwide.
Conventional Commercial Real Estate Loans: Fixed-Rate Financing for Investors and Owner-Occupants
Conventional commercial real estate loans provide stable, institutional-grade financing for income-producing properties and owner-occupied buildings without the government guarantee structure of SBA programs. At Commercial Capital Partners, we source and structure conventional commercial mortgages through regional banks, credit unions, insurance companies, and non-bank lenders — giving our clients access to a broad lending market and a range of terms that match their investment objectives.
What Is a Conventional Commercial Loan?
A conventional commercial mortgage is a real estate loan that is not backed by the SBA, HUD, or any other government agency. The loan is underwritten purely on the strength of the property, the borrower’s creditworthiness, and the deal’s financial fundamentals. Because there is no government guarantee, conventional lenders tend to require more equity and focus heavily on debt service coverage ratios (DSCR), loan-to-value (LTV), and the quality of the income stream supporting the loan.
Conventional financing is the right tool when the borrower has strong equity, the property generates reliable income, and long-term rate certainty or lower total borrowing cost is a priority.
Conventional Commercial Loan Terms
- Loan amounts: $500,000 and up — no upper limit on many programs
- Loan-to-value (LTV): Typically 65%–75% for investment properties; up to 80% for owner-occupants
- Amortization: 20, 25, or 30 years
- Fixed rate terms: 3, 5, 7, 10, 15, or 25 years fully fixed options available
- DSCR requirement: Minimum 1.20x–1.25x on most programs
- Recourse vs. non-recourse: Both available depending on deal size and lender
Property Types We Finance with Conventional Loans
- Retail strip centers and single-tenant net lease properties
- Office buildings (multi-tenant and single-tenant)
- Industrial and warehouse properties
- Multifamily (5+ units) apartment buildings
- Mixed-use commercial buildings
- Gas stations, auto-related businesses, and special-use properties
- Owner-occupied commercial facilities
Conventional vs. SBA: How to Choose
Many clients ask whether they should pursue a conventional loan or an SBA program for their transaction. The answer depends on the deal structure, the borrower’s equity position, and the intended use of the property.
SBA programs (7(a) and 504) allow for lower down payments — typically 10%–15% — making them ideal for borrowers who want to preserve working capital or lack the equity required by conventional lenders. Conventional loans, by contrast, require more equity but tend to offer lower total costs over time, fewer restrictions on property type, and no SBA fee structures.
For investment properties generating passive income, conventional is almost always the right path. For owner-occupants or business acquisitions, SBA often provides a better structure.
What Conventional Lenders Look For
Conventional commercial underwriting centers on three pillars: the property’s net operating income (NOI), the borrower’s global financial strength, and the quality of the collateral. Lenders calculate the debt service coverage ratio (NOI divided by annual debt service) and require a minimum cushion — typically 1.20x to 1.30x. They also evaluate the lease structure, tenant creditworthiness, market vacancy rates, and the condition and functional utility of the property.
Borrowers are expected to have liquid reserves post-closing, clean credit, and a track record of property management or business operations. For larger loan requests, lenders may require independent MAI appraisals, environmental reports (Phase I), and third-party property condition assessments.
Our Conventional Lending Network
Commercial Capital Partners works with a network of over 100 conventional lenders, including national banks, regional community banks, credit unions, CMBS platforms, and private capital sources. We match each deal to the lender with the most competitive terms and the highest probability of approval — not just the institution we have the easiest relationship with.
Get Conventional Commercial Financing Today
If you are purchasing or refinancing a commercial property in the Inland Empire, Los Angeles, or anywhere in Southern California, our team is ready to help. Call us at (909) 721-5915 or use our pre-qualification form to start the conversation. We will walk you through your options, run the numbers, and tell you exactly where you stand before you commit to anything.
