Commercial Real Estate Financing

The three underwriting lenses

Owner-occupied purchases are underwritten on the business's cash flow and use of the property. Investment property is underwritten on the property's income. Project-based funding : construction, fix-and-flip, bridge : is underwritten on the completed asset's value and the exit plan.

Identifying which lens applies to your situation is the fastest way to find the right guide below.

Fundamentals that apply across structures

• Equity contribution : meaningful down payments are standard
• Debt service coverage : income or cash flow must support the payment
• Property condition, appraisal and documentation
• Exit or hold strategy : sale, refinance, or long-term hold
• Experience with similar transactions

Timing considerations

Real estate transactions run on deadlines : closing dates, auction dates, balloon maturities, selling seasons. Match the structure to the timeline: bridge and fix-and-flip structures move quickly but cost more; conventional and SBA structures take longer but carry better long-term economics.