How Commercial Real Estate Financing works
Commercial real estate financing may support the acquisition, refinance, improvement, or construction of property used by a business or held for investment. Structures vary widely by occupancy, property type, cash flow, sponsor experience, and business plan.
Independent providers may evaluate both the property and the borrower or sponsor. Excel Capital Funding can help package the request and identify potential providers, but does not appraise property, provide investment advice, or guarantee financing.
May be a fit for
- Owner-occupied business property
- Income-producing commercial property
- Purchase or refinance with a defined exit or repayment plan
- Experienced sponsors pursuing a well-documented renovation or construction project
What providers evaluate
- Property type, location, condition, and occupancy
- Net operating income and debt-service coverage where applicable
- Borrower or sponsor credit, liquidity, and experience
- Loan-to-value or loan-to-cost limits
- Environmental, zoning, title, insurance, and appraisal requirements
Common documents
- Purchase contract or current mortgage statement
- Rent roll, leases, and property operating statements
- Borrower and guarantor financial statements and tax returns
- Project budget, plans, permits, and experience summary when applicable
- Entity, title, insurance, appraisal, and environmental documents during underwriting
Common business uses
- Property acquisition
- Rate-and-term or cash-out refinance when permitted
- Tenant improvements or renovation
- Ground-up construction or redevelopment through eligible programs
Required documents and permitted uses vary by provider, product, industry, and transaction. Additional information may be requested.
Evaluation process
- Provide the property, borrower, proposed use, budget, sources of equity, and requested timing.
- Submit operating history, leases, financial statements, and sponsor information.
- Compare proposals for leverage, pricing, amortization, maturity, recourse, reserves, covenants, prepayment, and closing requirements.
- The selected provider completes appraisal, title, environmental, insurance, legal, and other due diligence before closing.
Points to consider
- Closing costs and third-party reports can be significant and may be payable even if a transaction does not close.
- Balloon maturities, variable rates, recourse, reserves, and financial covenants can materially affect risk.
- Property value and projected income may change, and refinancing at maturity is not guaranteed.
- Investment property decisions should be reviewed with legal, tax, and investment professionals.
Frequently asked questions
Can both owner-occupied and investment properties qualify?
Potentially. They are usually evaluated under different programs and underwriting standards. Property use, income, sponsor strength, and transaction purpose guide the available options.
Will an appraisal be required?
Most commercial real estate providers require an acceptable appraisal or valuation, and may also require environmental, engineering, title, survey, or other reports.
What is a balloon payment?
It is a remaining principal balance due at maturity when the amortization schedule extends beyond the loan term. The borrower must pay, sell, or obtain new financing, which is not guaranteed.
Excel Capital Funding LLC acts solely as a commercial financing broker and referral source and is not a direct lender. Products are offered by independent providers and are subject to their underwriting, approval, documentation, and availability. Excel Capital Funding does not offer, broker, or arrange financing for businesses located in California.