In short
Commercial real estate financing funds the purchase or refinance of income-producing or business-use property. Approval is borrower specific: lenders weigh the property's debt service coverage (often 1.20x to 1.40x), 20% to 35% down on investor deals (as little as 10% with SBA 504 for owner-occupied space), 6 to 12 months of reserves, and 2 to 3 years of tax returns and rent rolls.
Reviewed by Scottie Campbell, NMLS #1610726 · Last updated October 18, 2026
How does commercial real estate financing work?
A commercial real estate loan is secured by income-producing or business-use property, and approval is borrower specific and driven by the property. Most lenders want the property's net operating income to cover the loan payment by 1.20x to 1.40x (the debt service coverage ratio). Investor deals typically need 20% to 35% down, while owner-occupied space can go as low as 10% down with SBA 504. Expect to show 6 to 12 months of payment reserves and 2 to 3 years of business and personal tax returns, plus rent rolls. I help you find the right financing and package the file so the lender sees the deal clearly.
Key takeaways
Commercial real estate gets judged differently than a house. The lender cares about the property's income, your experience and your reserves as much as your credit. I'm Scottie Campbell, a Mortgage Advisor and a real estate investor myself, and I help business owners and investors in Georgetown, TX find the right financing for retail, office, mixed-use, small multifamily and owner-occupied space. Approval is borrower specific, so we start with your deal, not a generic checklist.
Commercial Property Plays by Different Rules
If you've bought a home before, a commercial loan can feel like a different sport. A residential lender mostly asks, "Can this person afford the payment?" A commercial lender asks, "Can this property pay for itself, and can this borrower run it?"
Quite frankly, that's good news for a lot of investors and business owners. A strong property can carry a lot of weight in the decision. My job is to help you find the right financing for the deal in front of you, and to educate and empower you along the way. Your job is to decide.
What Lenders Look At
Commercial approval is borrower specific and driven by the property. Here's what most lenders weigh:
- Debt service coverage (DSCR). Most lenders want the property's net operating income at 1.20x to 1.40x the loan payment. In plain terms, the building should bring in more than enough to cover the mortgage with room to spare.
- Down payment. Investor deals usually call for 20% to 35% down. Owner-occupied space can go as low as 10% down with SBA 504.
- Reserves. Plan on 6 to 12 months of payment reserves after closing.
- Documentation. Expect 2 to 3 years of business and personal tax returns, plus rent rolls for any tenant-occupied space.
- Experience. Lenders like to see that you've owned or managed property before, or that you have a solid plan and team if you haven't.
What that means for you is simple: the cleaner the property's numbers and the more organized your paperwork, the stronger your file.
Investor Property vs. Owner-Occupied Space
| Investor property | Owner-occupied space | |
|---|---|---|
| Who uses it | Tenants pay rent to you | Your own business operates there |
| Typical down payment | 20% to 35% | As little as 10% with SBA 504 |
| What drives approval | Property income and DSCR | Business cash flow and the property |
| Common examples | Strip retail, small office, mixed-use, small multifamily | Your shop, clinic, office or warehouse |
If your business will occupy the building, it's worth looking at the SBA route. SBA 504 requires the business to occupy at least 51% of the property, and it's one of the few ways to buy commercial space with a smaller down payment. I'll walk you through whether that path fits or whether a conventional commercial loan makes more sense.
Why Work With Me on a Commercial Deal
I've been in mortgage since 2003, and I'm an active real estate investor myself. I understand the questions you're asking because I've asked them on my own deals.
- I help you find the right financing. Commercial lenders each have their own appetite for property types, deal sizes and locations. I help match your deal to financing that fits.
- I package the story. A rent roll, a T-12 and tax returns tell a story. I help make sure that story is clear before a lender ever sees it.
- Total Cost Analysis. We look at the full cost of the loan over the time you plan to hold the property, not just the payment on day one. Your rate depends on your scenario and the day's market. Reach out and I'll price it for real.
- High-tech, high-touch. You get organized digital document collection and a real person who picks up the phone. Feel free to text me.
How the Process Works
- Conversation first. Tell me about the property, how you'll use it and your timeline. I'll ask about income, occupancy and your experience.
- Gather the numbers. Rent rolls, operating statements, tax returns and a personal financial statement.
- Build your Mortgage Action Plan. I'll lay out the realistic options, the down payment and reserves each one needs, and the tradeoffs.
- Submit and manage. I help you work through appraisal, environmental review if required, and lender questions through closing.
Can't Do It Now Doesn't Mean Can't Do It Ever
Maybe the property's coverage is a little thin, or your reserves aren't quite there yet. It's never a no. It's always a how. Sometimes the answer is a larger down payment, a different structure, or waiting until a vacancy is leased up. I'll tell you straight what I see so you can make the call.
Whether you're buying your first small commercial building in Georgetown, TX or adding to a portfolio, I'm here to serve. You're talking to the owner of this company.
Information on this page is general and educational. It is not a commitment to lend or an offer of credit. Commercial and business financing is borrower specific, and programs, guidelines and eligibility change and depend on your full scenario. Waymaker Mortgage Company, NMLS 2440476. Equal Housing Lender.
Quick facts
- Minimum credit score
- Borrower specific; driven by the property
- Typical DSCR
- 1.20x to 1.40x
- Down payment
- 20% to 35% investor; as little as 10% with SBA 504 owner-occupied
- Reserves
- 6 to 12 months of payments
- Documentation
- 2 to 3 years business and personal tax returns, rent rolls
- SBA 504 occupancy
- Business occupies at least 51%
Is this loan right for you?
Who it's for
- Investors buying retail, office, mixed-use or small multifamily property
- Business owners ready to buy the building they operate from
- Investors refinancing a commercial property they already own
- Borrowers whose deal has solid income and organized financials
Who it may not fit
- Buyers of a 1 to 4 unit home they'll live in (a residential loan usually fits better)
- Borrowers without reserves or a down payment in place yet
Pros and cons
Pros
- Approval leans heavily on the property's income, not just personal income
- Owner-occupied buyers may use SBA 504 with as little as 10% down
- Lets your business build equity in its own real estate instead of paying rent
- Works for many property types, from small retail to mixed-use
- Total Cost Analysis keeps the focus on the full cost over your hold period
Trade-offs to weigh
- Larger down payment and reserve requirements than residential loans
- More documentation, including tax returns, rent rolls and operating statements
- Appraisals and reviews can take longer than on a home purchase
Frequently asked questions
What credit score do I need for a commercial real estate loan?
There isn't one universal number. Commercial approval is borrower specific and driven by the property: lenders weigh debt service coverage, down payment, reserves and your experience alongside credit. Tell me about your deal and I'll give you a straight read on where you stand.
How much down do I need to buy commercial property?
Investor deals usually call for 20% to 35% down. If your own business will occupy the space, SBA 504 can go as low as 10% down, as long as the business occupies at least 51% of the property.
What is DSCR and why does it matter?
DSCR, or debt service coverage ratio, compares the property's net operating income to the loan payment. Most commercial lenders want it at 1.20x to 1.40x, meaning the property earns 20% to 40% more than the payment. It's often the single biggest factor in a commercial approval.
What documents should I have ready?
Plan on 2 to 3 years of business and personal tax returns, rent rolls and operating statements for the property, a personal financial statement, and proof of 6 to 12 months of payment reserves. I'll give you a specific list once I understand the deal.
What kinds of properties can be financed?
Common examples include small retail, office, mixed-use, small multifamily, warehouse and owner-occupied business space. Every lender has its own appetite, so I help you find the right financing for your property type.
What will my rate be?
Your rate depends on your scenario and the day's market. Reach out and I'll price it for real.
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Last updated October 18, 2026 · Reviewed by Scottie Campbell, NMLS #1610726. This page is educational and not a commitment to lend; program details change — ask for current figures.