Commercial Real Estate Loans From $3M–$100M

Matching the Loan to the Investment Plan

A stabilized acquisition, a ground-up development and a transitional hotel require different capital. Permanent loans prioritize durable cash flow, while bridge and construction lenders focus more heavily on the future business plan, remaining cost and path to stabilization.

The financing request should explain how proceeds support the investment strategy. That includes acquisition price or basis, renovation and tenant costs, operating reserves, equity contribution and the intended hold period.

• Acquisition financing for stabilized or transitional assets
• Construction and development loans with future funding
• Bridge capital for renovation, lease-up or repositioning
• Refinancing for maturity, equity access or improved structure

The Main Commercial Real Estate Lender Types

Banks, credit unions, insurance companies, debt funds, private lenders and securitized lenders each evaluate risk differently. Some prioritize relationship deposits and recourse; others focus on property cash flow, institutional sponsorship or a defined value-add plan.

A $5M request may attract a different lender universe than a $50M portfolio. Borrowers should screen for minimum loan size, geographic appetite, property-type experience and the lender’s ability to hold or distribute the exposure.

Core Underwriting Metrics

Loan-to-value compares the loan with appraised value, while loan-to-cost compares debt with total project cost. DSCR tests whether net operating income covers scheduled debt service, and debt yield measures NOI relative to the loan amount without relying on the interest rate or amortization.

No single metric determines approval. Lenders also review occupancy, tenant rollover, market supply, capital expenditures, guarantor strength and the downside value of the collateral.

• LTV and LTC for leverage and borrower basis
• DSCR for current or stabilized payment coverage
• Debt yield for unlevered credit protection
• Sponsor liquidity, net worth and relevant execution history

Fixed, Floating, Amortizing and Interest-Only Structures

Fixed-rate debt can provide payment certainty for a longer hold, while floating-rate debt may offer flexibility for transitional assets or shorter investment periods. Amortization reduces principal over time; interest-only payments preserve near-term cash flow but leave a larger payoff balance.

Prepayment provisions can materially affect a sale or refinance. Yield maintenance, defeasance, step-down penalties and minimum-interest requirements should be evaluated alongside the coupon and proceeds.

Preparing a Financeable Loan Request

Institutional-quality presentation improves the lender’s ability to assess the opportunity quickly. The package should reconcile the requested loan with the purchase contract, existing debt, renovation budget and borrower equity.

Borrowers should be ready to explain property performance, material leases, capital needs, ownership structure and the source of repayment. Clear answers reduce avoidable credit questions and help preserve execution timing.

• Executive transaction summary and requested structure
• Historical and projected property financials
• Current rent roll, leases and operating statements
• Sponsor biography, schedule of real estate and liquidity support
• Sources and uses, capital budget and exit strategy