Stop paying rent to someone else’s building
Texas business owners — dentists, contractors, restaurateurs, auto shops, small manufacturers, professional practices — often reach the point where the rent check is building someone else’s equity. Buying the property you operate from can change that, and it is a very different loan from a home mortgage.
How commercial property loans differ
A home loan is underwritten mostly on you. A commercial property loan is underwritten on the business’s cash flow, the property itself, and your track record as an owner. Expect to share business returns and financial statements, and expect the lender to care how the property will be used and how stable the business is.
Timelines are longer, documentation is heavier, and the structure can vary widely. That is fine, as long as nobody pretends otherwise at the start.
Common structures
- Owner-occupied commercial real estate loans for a building your business will occupy.
- SBA 504 — a lender and a Certified Development Company share the financing of major fixed assets such as real estate.
- SBA 7(a) — a flexible SBA program that can include real estate alongside other business needs.
- Mixed-use — a storefront with living space above can be financed commercially or, in some cases, residentially, depending on the property.
- Investment property with one to four units is usually handled as residential financing — see investors and non-QM DSCR loans.
Which of these is available for your deal depends on the business, the property and current program availability.
What to have ready
- Two to three years of business tax returns and year-end financial statements
- A year-to-date profit and loss statement and balance sheet
- Personal financial information for each owner
- The property address, the purchase contract or current mortgage, and how much of the building your business will occupy
- Any existing or proposed leases for the rest of the building
If your personal file is complicated too
Many business owners have strong companies and personal tax returns that look thin. If you are also buying or refinancing a home, non-QM and self-employed options may matter as much as the commercial loan.
What I will not do on this page
Quote rates, terms or payments. Commercial terms depend on the business, the property and the market. Applications, pricing and disclosures are handled through All Western Mortgage.