Real Estate Loans

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What are commercial real estate loans?

Do you own a commercial property but you lack the credit to qualify with a bank? Are you in need of a simple line of credit to boost your business? Not looking to refinance for the next thirty years, just need something short and simple? SpotOn Financial can provide a business loan using the equity in your commercial property. No need to refinance the entire loan, we use a simple formula to offer working capital in a second position behind your existing loan. So you don’t need to give up your low rate, or extended terms to get the capital you need today to build your business tomorrow. You are not limited to use of the funds and we can have you the capital you need in as little as 5 business days.

  • Approval not solely credit based
  • Working capital from $25K – $4M with no set terms
  • No restrictions on use of Funds
  • 24 hour approval. Fast, Free, No obligation quote
  • FICO Down to 550. Early payoff discounts
  • Most Real Estate Accepted. Investor Properties Qualify

1. Commercial Investment Loans

Commercial investment property loans are designed for properties with five units or more, as well as other non-residential investment properties. These properties can be owner-occupied or non owner occupied. An owner occupied property means you will use the property as a primary office or location for your business. You can classify a commercial property for investment purpose and owner occupied when the property has a dual purpose, an example would be a mixed use property where you have a restaurant on the first floor, and apartments above. Owner would need to occupy the restaurant, and rent the apartments above.

These loans can also be used to buy or refinance anything from a shopping mall, apartment building (with 5 or more units,) an office complex, and any other kind of commercial investment. You will likely find higher rates than you’d get with a residential loan, as well as shorter lengths of time before the loan is due, with balloon payments often due after 5, 7, or 10 years.

2. Residential Investor Loans

Our simple process provides a business access to immediate cash at competitive rates for a terms up to 60 months. We review all types of commercial properties both non owner occupied and owner use! Not available in all states.

Long-Term Rental Financing

Obtain long-term rental financing with 30-year terms and rates starting at 5.99%

Loan Criteria

Collateral:
Non-Owner Occupied 1-4 Family Real Estate; Condos; Townhomes;
Planned Unit Development (PUD)

Rates:
Starting at 5.99%

Term:
30 Years

Loan Amount:
$75K-$1M

LTV:
Purchase: The Lesser of up to 80% of the As-Is Value or Up to 80% Loan-to-Cost
Refinance: Up to 65% of the As-Is Value
Cashout: Up to 70% of the As-Is Value

Property Value:
“As-Is” Appraised Value Must Be Greater Than $100K

Credit Score:
660 Minimum

Property Debt-To-Income Ratio (PDTI):
For Property Values between $100k & $150k: Must be less than or equal to 75% of interest & scheduled principal
For Property Values greater than $150k: Must be less than or equal to 85% of interest & scheduled principal

Short-Term Bridge Financing for Rental Properties

Obtain bridge financing for rental properties with terms up to 36 months and rates starting at 8.49%

Loan Criteria

Collateral:
Non-owner Occupied 1-4 Family & Multi-Family Real Estate;
Condos; Townhomes; 5+ Unit Apartments; Mixed-Use Properties

Rates:
Starting at 8.49%

Term:
24 months (12-month extension available*)

Loan Amount:
$50K-$2.5M**

LTV:
Purchase: The Lesser of up to 75% of the As-Is Value or Up to 75% Loan-to-Cost
Refinance: Up to 75% of the As-Is Value
Cashout: Up to 70% of the As-Is Value

Property Value:
“As-Is” Appraised Value Must Be Greater Than $75K

Credit Score:
660 Minimum

Rent Coverage Ratio (Monthly Rent/Monthly Interest):
1.25

*Extension fee applies
**$1M max per unit

Fix & Flip Financing

Obtain financing for up to 85% of the purchase price + up to 100% of the renovation costs with rates starting as low as 7.99%

Loan Criteria

Collateral:
Non-owner Occupied 1-4 Family & Multi-Family Real Estate;
Condos; Townhomes; 5+ Unit Apartments; Mixed-Use Properties

Rates:
Starting at 7.99%
Interest Only Charged on Outstanding Balance

Term:
30 Years

Loan Amount:
$75k-$2.5M

LTV:
Up to 85% of the Purchase Price + 100% of the Renovation Costs
(Not to Exceed 75% of the After Repair Value)

Property Value:
“As-Is” Appraised Value Must Be Greater Than $100K

Credit Score:
600 Minimum

Experience:
Prior Real Estate Investing Experience Preferred

2. Residential Investor Loans

Our simple process provides a business access to immediate cash at competitive rates for a terms up to 60 months. We review all types of commercial properties both non owner occupied and owner use! Not available in all states.

Long-Term Rental Financing

Obtain long-term rental financing with 30-year terms and rates starting at 5.99%

Loan Criteria

Collateral:
Non-Owner Occupied 1-4 Family Real Estate; Condos; Townhomes;
Planned Unit Development (PUD)

Rates:
Starting at 5.99%

Term:
30 Years

Loan Amount:
$75K-$1M

LTV:
Purchase: The Lesser of up to 80% of the As-Is Value or Up to 80% Loan-to-Cost
Refinance: Up to 65% of the As-Is Value
Cashout: Up to 70% of the As-Is Value

Property Value:
“As-Is” Appraised Value Must Be Greater Than $100K

Credit Score:
660 Minimum

Property Debt-To-Income Ratio (PDTI):
For Property Values between $100k & $150k: Must be less than or equal to 75% of interest & scheduled principal
For Property Values greater than $150k: Must be less than or equal to 85% of interest & scheduled principal

Short-Term Bridge Financing for Rental Properties

Obtain bridge financing for rental properties with terms up to 36 months and rates starting at 8.49%

Loan Criteria

Collateral:
Non-owner Occupied 1-4 Family & Multi-Family Real Estate;
Condos; Townhomes; 5+ Unit Apartments; Mixed-Use Properties

Rates:
Starting at 8.49%

Term:
24 months (12-month extension available*)

Loan Amount:
$50K-$2.5M**

LTV:
Purchase: The Lesser of up to 75% of the As-Is Value or Up to 75% Loan-to-Cost
Refinance: Up to 75% of the As-Is Value
Cashout: Up to 70% of the As-Is Value

Property Value:
“As-Is” Appraised Value Must Be Greater Than $75K

Credit Score:
660 Minimum

Rent Coverage Ratio (Monthly Rent/Monthly Interest):
1.25

*Extension fee applies
**$1M max per unit

Fix & Flip Financing

Obtain financing for up to 85% of the purchase price + up to 100% of the renovation costs with rates starting as low as 7.99%

Loan Criteria

Collateral:
Non-owner Occupied 1-4 Family & Multi-Family Real Estate;
Condos; Townhomes; 5+ Unit Apartments; Mixed-Use Properties

Rates:
Starting at 7.99%
Interest Only Charged on Outstanding Balance

Term:
30 Years

Loan Amount:
$75k-$2.5M

LTV:
Up to 85% of the Purchase Price + 100% of the Renovation Costs
(Not to Exceed 75% of the After Repair Value)

Property Value:
“As-Is” Appraised Value Must Be Greater Than $100K

Credit Score:
600 Minimum

Experience:
Prior Real Estate Investing Experience Preferred

Commercial vs Residential Loans

Commercial loans differ from residential loans in several key ways. Although they do look at the same standards as residential loans, they look at them from a slightly different angle. Here are few things you should know prior to applying for your loan:

Borrower vs Property Debt to Income: Obviously, debt and income is still important as a factor for lending, as it shows what kind of financial person you are. However, when dealing with multi-million dollar loan amounts, a person’s personal income becomes much less important because, frankly, if things went south, a borrowers job income is not going to be able to make the payment, regardless. This is why SpotOn Financial will look at commercial property with a different view. Our decision is based much higher on two things:

  • 1. The ability for the property to provide cash flow.
  • 2. The investors experience and ability to manage the business or property.

These two characteristics of the deal are much more important in decision-making for the deal than the official “debt to income.” This is why it is so important to obtain the best deal possible when looking for investment property. When you are applying for a commercial loan, it’s also important that you properly convey yourself as the business owner that you are – not some hobbyist. We suggest a borrower have a business plan prepared, know the answers to the questions we will ask, and know the deal inside and out. Consider a property investment loan request the same as a job interview – and come prepared. Understand clearly the value proposition for you the investor, and us the lender.

Credit Score: Credit score is still highly important for commercial lenders, because it conveys your ability to handle money and credit well. Although the rates differ, we typically want to see at least 680 or higher for a credit score.

Loan to Value: Loan to value is much more valued in commercial real estate lending than residential. As mentioned earlier, we prefer our borrowers are not over-leveraged and they have significant equity in the deal. Typically, a we will want a minimum of 70% loan to value (LTV) on a deal so we have 30% equity in case we need to foreclose and re-sell the property.
Debt Service Coverage Ratio: Exclusive to commercial investing, the debt service coverage ratio, or DSCR, is a ratio used to look at the properties ability to generate cash flow. Essentially, the DSCR compares the total income that comes in (not including the mortgage payment) with the payment on all debts. Here is the simple formula

DSCR = (Net Operating Income) / (Debt Service)

For example, if a property’s Net Operating Income (the total income left to pay the mortgage) is $10,000 per year and the total debt payment is $10,000 per year – the DSCR would be “1.” Typically, a commercial lender wants to see a DSCR of at least 1.2 – meaning that after all the expenses are paid, there is at least 20% cash flow profit on top. Keep in mind -this is a very basic explanation of the Debt Service Coverage Ratio. The purpose of the example is to provide a basic understanding prior to you applying. The more you know the greater chance you are approved.

Landlord Experience: As mentioned earlier, a approach your loan request like a job interview. You are asking SpotOn Financial to fund your next deal. Like a job interview, experience is key to success. Experience as a landlord is not always a requirement, but it definitely helps your case as a good bet for approval on the loan request.

Property Types: SpotOn Financial will consider all commercial cash flowing properties. We look for the bank quality properties (multi-family, office, retail, and mixed use) we also like gas stations, C-stores, single purpose, church or religious properties, auto repair, and car dealerships.

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