How much higher in % do commercial loans run compared to single family residential.

For example if single family rates are now at about 5% for a 30 year fixed then would a commercial 30 year fixed be 5.5, 6, 8, 9, more??? Assume good credit.
In Buying Property - Asked by Larry K. - Jul 30, 2009
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Answer(s)

Mike F.
Broker/Agent
Atlanta, GA

That depends on the type of Commercial Real Estate the loan is originated to finance and the amount financed. On properties, that are over 50% user occupied but under certain lending limits, many banks will offer very favorable terms (maybe 1.5-3.0% higher than a residential loan) and the SBA even gaurantees many of these loans. You rarely see a 30 year term on a commercial loan. 3, 5, 10, 15 and 20 years are more common.

Jul 30, 2009
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Chris S.
Broker/Agent
Coeur D'alene, ID

30 fixed in commercial? Not going to happen. You'b be very lucky to see a commercial loan fixed for much more than a couple of years. 99% of lenders in the commercial field are looking at 3-5 maturity dates and a 20 year amortization schedule. On some multi-family deals you might find longer.
Good credit is helpful, but banks want cash flow, debt coverage, and loan to value. Across the board I would expect to see interest rates in the high 7% to low 9% range.

Aug 3, 2009
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Gregory G.
Broker/Agent
San Francisco, CA

Commercial loans do not come in 30 year fixed.

Aug 14, 2009
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