Commercial Loans Under $1 MM Are Hard to Find

If you’ve got a commercial loan OVER $1,000,000, well, there are certainly a lot of candidates out there for financing. The commercial lending space is dominated by lenders that won’t even look at a loan request unless it’s

over $5 MM. However, commercial lenders that finance smaller balance loans of between $250,000 and $1,000,000, are very hard to find. Even the most reputable bridge lenders typically only consider properties over $1 MM as candidates for commercial hard money loans.

So where do borrowers go for commercial loans under $1 MM? Prior to 2009, it used to be the local community bank and the smaller lending institutions that readily financed the small balance commercial loans. These days, it is still the smaller financial institutions that are financing these deals, but only if they qualify. Without stellar credit and extensive income documentation, it is hard for borrowers to qualify for bank loans these days. And if you have a vacant property, or a property in need of extensive repairs, forget about it!

There are bridge lenders, also called commercial hard money lenders, that are funding commercial loans under $1 MM. Smaller commercial bridge lenders tend to be well-capitalized, have flexible loan requirements, and can fund their loans faster than a bank. Because the lending landscape is continuously evolving, the lack of commercial loans for smaller balance transactions under $1 MM will continue to be hard to find. For this very reason it’s crucial to put as many options on the table for commercial financing, for your next acquisition or refinance.

Posted by Corey Curwick Dutton