Commercial Real Estate Financing: What Borrowers Need to Know

Commercial real estate (CRE) financing covers income-producing properties — office, retail, industrial, mixed-use, self-storage, and more. Unlike residential loans, CRE underwriting focuses on the property's cash flow and the borrower's experience.

Key metrics include Net Operating Income (NOI), Debt Service Coverage Ratio (DSCR), and Loan-to-Value (LTV). Most lenders require a DSCR of 1.20–1.35 and LTV of 65–75%.

CRE loan types include conventional bank loans, agency debt (CMBS), SBA 504 for owner-occupied properties, and bridge loans for value-add acquisitions. Terms range from 5-year bridge to 30-year fixed.

Preparation matters. Have your rent roll, trailing 12-month financials, property condition report, and a clear business plan ready before applying. Experienced sponsors with track records access better terms.

Whether you're acquiring a stabilized asset or executing a value-add plan, Yoder Funding connects you with the right capital source. Request a commercial loan review to get started.