Commercial loans - Less than 20% downpayment?

[Terry N.]

I've heard on the BP Rookie podcast a few discussions about commercial loans with downpayments less than 20%. What are the caveats? Must be an LLC business? Only special types of loans? Any resources, experience, perspective that anyone can share would be greatly appreciated.

[Matthew Crivelli]

Typically the loan has to be held under an LLC and the property must be an add value situation. The better the deal the better chance of having a smaller down payment. From what I can see being new and not having any on paper experience with flipping or brrring decent credit will go a long way. Remember even though the down payment will be small most lenders want to see funds on top of the down payment. The 3 C's of hard money - Cash- Collateral- Credit