Bank Loans

For Financing Commercial Real Estate
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Bank Loans for Commercial Real Estate

Many borrowers think the best commercial real estate loan is available at their local bank. While this is sometimes the case, there are significant differences between banks in their loan terms, maximum leverage, rates, and amortization. Beyond their underwriting differences, different banks may offer more favorable financing based on asset type, geography, and other factors either because they specialize in a certain deal type, or simply to balance their commercial mortgage portfolio. Matching the right bank to your project can make a huge difference in getting the most favorable loan.  Finding that loan means connecting to decision makers at dozens or even hundreds of community banks, regional banks, and national banks.

Banks are a solid starting point in your loan search because of the large number of loan products they can offer (fixed and floating rates, short term bridge loans and loan term permanent loans). In addition, banks can provide debt financing on all types of commercial real estate asset classes including office, multifamily, retail, industrial and hotel. Bank loans are generally most competitive for cash-flowing loan scenarios and for construction for strong borrowers.

Loan Amount:

$500,000 to $5 Million+

Max LTV:

60% - 75%

Typical Term:

5, 7, or 10 years
  • Greater flexibility in loan terms
  • Many banks to compare and find the best offer
  • Recourse and non-recourse options
  • Competitive terms for cash-flowing assets
  • Smaller loan amounts possible
Pro Forma Financials
Schedule of Real Estate Owned
Personal Financial Statement (for Guarantors)
  • Acceptable borrower/guarantor credit score
  • Sufficient equity invested into the deal
  • Cash flow or a strong and reasonable pro forma

How to Get a Bank Loan

You can get a bank loan by compiling the required documents and presenting them to a loan officer at a bank branch. However, getting the best loan requires going to dozens of local, regional, and national banks and then using their offers to negotiate for the best terms. That's why we built StackSource to enable borrowers to easily present a real estate project to banks in our lender network. A StackSource Capital Advisor guides you through the loan process and helps you negotiate to get the best loan.

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Guide to Commercial Real Estate Bank Loans

Acquisition Loans

Banks loans are a great option for acquisition loans. For multifamily properties, certain banks can typically close faster than agency loans from Freddie and Fannie.

Refinance Loans

Refinancing a commercial mortgage using a bank loan is a solid option especially for cash-flowing assets with good financials.  It can take several months to get a bank loan from engagement to closing, so it is a good idea to get started well in advance of the final balloon payment on your current loan.

Construction and Rehab Loans

Banks are an excellent option for borrowers with solid financials and a strong track record. Bank loans have low rates compared to other commercial mortgage options such as hard money loans. Another benefit of using a bank to finance your construction loan is that certain banks may offer construction-to-perm financing that enables the borrower to immediately refinance to a lower rate after the construction project is completed.

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Further reading