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Commercial Real Estate Loans

Fountainhead Funding offers loan products for commercial real estate loans nationwide. Our goal is to add value to your acquisition or refinance by offering a wide range of financing solutions and direct access to top national and local lenders.

Our minimum loan size transaction is $250,000 and goes up to $30,000,000+. We ask that you fill in this Commercial Real Estate Loans Worksheet after you have browsed the information below.

CAUTION: Obtaining a commercial real estate loan is very different from getting a residential mortgage. It is dependent on many factors and takes a lot more time. You should allow 60 - 90 days for the entire process from application to closing.

Some of the most important factors that any lender consider are listed below and are commonly referred to as the “three Cs” of credit.

Of course, the conditions of the economy, use of the funds you are requesting, the experience of the lending officer and the credit policies of the lending institution certainly impact the process of getting a commercial real estate loan.

Interest Rates and Fees

Interest rates vary per loan commitment because they are a function of risk. All “three Cs” are considered when pricing a commercial real estate loan. Interest rates may be fixed, variable or a combination of the two. Fixed rates may be fixed to term or fixed for a period of time then reset according to a previously agreed-upon index and margin. This type of pricing is most commonly used for financing long-term fixed assets such as owner-occupied commercial real estate and non-owner-occupied (investment) real estate. Variable rates adjust from time to time and are common for U.S. Small Business Administration (“SBA”) 7(a) guaranteed loans and in times of volatile interest rates.

Loan commitment fees and prepayment penalties are common costs associated with long-term loans, especially commercial real estate loans, and should be expected. They vary between lenders.

Commercial real estate loans are available for most properties. However, some property types are not on the “preferred” list of every lender. Some loan applications cannot be considered due to geographic boundaries of the lender, some are rejected due to industry type such as hospitality, entertainment or environmentally-sensitive loans, and some just don’t make sense from a regulated lender’s perspective such as loans based on fair market value rather than cost. SBA loans, including “7(a) guaranteed loans” and “504 loans,” are available for the financing of most types of commercial properties. They are available from SBA-approved lenders nationwide.

“Loan-to-Cost” or “Loan-to-Value” (Fair Market Value)

Traditional and SBA lenders base their lending decisions on “loan-to-cost” or “loan-to-value,” whichever is lower. Loan-to-value (FMV) loans are generally accepted for lending purposes when the property is being refinanced and has been owned for at least two years. Alternatively, “hard money” loans are available based on the fair market values (loan-to-value).

The primary differences between commercial, SBA and hard money loans are loan term and down payment.

Examples of typical loan terms

Down payments towards purchases are to be expected. So are personal guarantees of owners of 20% or more of the business or property. They vary from lender to lender and depend on the deal.

Generally, commercial lenders look for a down payment or equity contribution to the project to be financed in the 20% - 30% range whereas SBA loans require as little as 10% down for qualified applicants. In many cases, SBA loans require additional collateral beyond the commercial real estate and may even include a mortgage against your home. Hard money lenders generally require 30% - 50% down and are less concerned with the “three Cs”.

Perhaps you have already talked to your banker and have been turned away. Perhaps you have experienced the process of obtaining an SBA loan or heard about it from someone and the news was not good. Perhaps you need a hard money loan and don‘t know where to obtain one. Don’t let anyone discourage you. Whatever your commercial loan needs, our associates at Fountainhead Funding can assist you in obtaining a commercial or SBA loan, anywhere in the country and for any reason. If we can’t do it, chances are we know someone who can.

In order to better serve you, please provide us with some basic information by completing our Real Estate Loan Worksheet.

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