Commercial Loan Comparison Matrix
Choosing the right financing facility can mean the difference between a 10% vs 30% down payment and 100+ basis points on interest. Compare underwriting standards across senior lending facilities.
Reviewed by Marcus Vance, CCIM & Elena Rostova, CPA (Senior Commercial Underwriting Lead & SBA Analyst)
Which commercial loan facility offers the lowest down payment and best rates?
SBA 504 and 7(a) loans offer the lowest down payments (10% to 15%) for owner-occupied business properties, with 504 offering 25-year fixed below-market rates. For pure real estate investors, DSCR loans require 20% to 25% down without tax returns, while conventional bank commercial mortgages require 25% to 35% down.
Side-by-Side Facility Comparison
Scroll horizontally to view all parameters →| Loan Facility | Max LTV / LTC | Target DSCR | Term & Amortization | Owner Occupancy | Personal Guarantee | Primary Advantage | Action |
|---|---|---|---|---|---|---|---|
SBA 7(a) Loan Government-Guaranteed Small Business | Up to 90% (85% on CRE) | 1.15x (1.25x target) | 10 yrs (working capital/equipment) / 25 yrs (CRE) | ≥ 51% existing / ≥ 60% new construction | Full Personal Guarantee for all ≥ 20% owners | Low down payment (10%), flexible use of proceeds, long amortization | Pre-Evaluate |
SBA 504 Loan Fixed-Asset Economic Development | Up to 90% (50% Bank, 40% CDC, 10% Borrower) | 1.20x | 10, 20, or 25-year below-market fixed debenture | ≥ 51% existing / ≥ 60% new construction | Full Personal Guarantee for all ≥ 20% owners | Long-term below-market fixed rate on 40% debenture; low 10% equity injection | Pre-Evaluate |
Conventional Commercial Mortgage Bank / Credit Union Portfolio | 65% to 75% LTV | 1.25x to 1.35x | 5 to 10-year term with 20 to 25-year amortization schedule | Both owner-occupied and investor properties eligible | Recourse required; non-recourse available for Tier 1 institutional deals | Lower closing fees than SBA, no government red tape, flexible covenants | Pre-Evaluate |
DSCR Investment Property Loan Private Investor Mortgage | 75% to 80% LTV | 1.00x to 1.25x (cash-flow based) | 30-year fixed or 40-year interest-only | 0% (Non-owner occupied investment property strictly required) | Personal guarantee without personal DTI income verification | No personal tax returns, W-2s, or DTI calculation; qualified solely on lease income | Pre-Evaluate |
Commercial Bridge / Mezzanine Short-Term Private Capital | 65% to 75% LTC (Loan to Cost) | Often interest-reserve based (no current DSCR minimum) | 12 to 36 months interest-only | Any commercial property or repositioning asset | Recourse or Bad-Boy carveout non-recourse | Fast closing (10–21 days); finances heavy renovation budgets and lease-up deficits | Pre-Evaluate |
Best For: Business acquisitions, partner buyouts, working capital, owner-occupied CRE
Key Advantage: Low down payment (10%), flexible use of proceeds, long amortization
Trade-Off / Drawback: Extensive documentation, SBA guarantee fee (2.25%–3.75%), closing takes 45–75 days
Max Amount: $5,000,000
Interest Structure: Prime + 2.25% to 4.75% (Variable or Fixed)
Best For: Owner-occupied commercial real estate purchase or heavy manufacturing equipment
Key Advantage: Long-term below-market fixed rate on 40% debenture; low 10% equity injection
Trade-Off / Drawback: Cannot be used for working capital or inventory; dual-lender closing fees
Max Amount: $5,500,000 (up to $5.5M for CDC debenture; no total cap)
Interest Structure: Fixed rate pegged to 10-year Treasury rate
Best For: Established businesses and investors with strong balance sheets seeking fast closing
Key Advantage: Lower closing fees than SBA, no government red tape, flexible covenants
Trade-Off / Drawback: Requires 25%–35% equity down payment; balloon payment after 5–10 years
Max Amount: $1,000,000 to $50,000,000+
Interest Structure: Fixed 5-7 years, then floating (SOFR + spread)
Best For: 1-4 unit residential rental portfolios, multi-family investors, and BRRRR strategies
Key Advantage: No personal tax returns, W-2s, or DTI calculation; qualified solely on lease income
Trade-Off / Drawback: Higher interest rate than agency loans; prepayment penalties (typically 3-2-1 years)
Max Amount: $100,000 to $3,500,000
Interest Structure: Fixed 30-year rate (~1.0%–2.0% above conventional prime)
Best For: Value-add renovations, lease-up phase, distressed asset repositioning, or quick close
Key Advantage: Fast closing (10–21 days); finances heavy renovation budgets and lease-up deficits
Trade-Off / Drawback: High origination points (1%–3%) and high interest rate; requires clear takeout exit
Max Amount: $1,000,000 to $25,000,000+
Interest Structure: Floating rate (SOFR + 400–800 bps) or fixed 9%–12%