Commercial Property Purchase Loans

A commercial purchase loan is acquisition financing secured by the property being bought. The lender sizes the loan against the lesser of the contract price and the appraised value, and the contract's diligence deadlines set the clock for everything else.

Q Commercial Capital places purchase financing with wholesale lenders whose appetite matches the asset, the borrower, and the deal timeline. We are a brokerage, not a lender. Terms vary by lender, property, borrower, and transaction.

Program overview

Purchase financing can be structured as permanent debt on a stabilized asset, a bridge for a transitional property, or an owner-occupied loan where the business will use the building. The right structure depends on the property's income, condition, occupancy, and the buyer's plan.

The purchase contract is a central underwriting document. It sets the price, deposit, closing date, inspection period, financing contingency, and seller representations. A contract written without regard to commercial lending timelines can create unnecessary pressure, and a missing financing contingency can put the deposit at risk.

Who this program fits

Investors acquiring stabilized or transitional commercial property
Owner-users buying the building their business will occupy
Buyers moving from residential rentals into a commercial asset
Entities purchasing property for a long-term hold
Sponsors with a documented down payment source and post-closing liquidity

Eligible property types

Multifamily — five-plus-unit apartment properties
Mixed-use — residential and commercial space in one building
Retail — strip centers, neighborhood centers, and single-tenant retail
Office — professional, medical, and general office buildings
Industrial — warehouse, distribution, flex, and light-manufacturing space
Automotive and specialty — service properties, car washes, and self-storage

Eligible loan purposes

Stabilized acquisition. Permanent financing for an income-producing property.
Value-add acquisition. A bridge or transitional structure for a property that needs work or lease-up.
Owner-occupied purchase. Financing a building the business will occupy.
Portfolio acquisition. Multiple properties purchased in one transaction, subject to lender parameters.

Price, appraisal, and loan sizing

The lender uses the lower of contract price and appraised value. If the appraisal comes in below the contract, the loan shrinks and the buyer covers the gap or renegotiates. The appraisal also tests the property's income, condition, and comparable sales, so a weak appraisal can affect both value and loan amount.

Down payment and liquidity

The borrower must document the source of the down payment and closing costs, and usually must show reserves after closing. Gift funds, borrowed funds, and recently deposited cash receive additional scrutiny. A buyer who is fully depleted at closing is a repayment risk even when the property performs.

Property condition and lease review

The lender reviews the property condition report, environmental screen, leases, rent roll, and estoppels. Deferred maintenance, near-term rollover, tenant concentration, and environmental history can reduce proceeds, require escrows, or end the transaction.

Property income and occupancy

A current rent roll, a trailing twelve-month operating statement (T-12), copies of executed leases or a representative sample, and an aged receivables report. Lenders use these to verify the income they are underwriting rather than the income described in an offering summary. A rent roll that does not reconcile to the operating statement is one of the most common reasons a file stalls.

Borrower, guarantor, and entity documentation

A personal financial statement and schedule of real estate owned for each guarantor, typically two years of personal and business tax returns, two to three months of bank statements, and the borrower entity's formation documents, operating agreement, EIN confirmation, and certificate of good standing. Where ownership is layered, expect an ownership org chart and authority documents for each level.

Third-party reports and closing items

The lender orders the commercial appraisal, and depending on the property and program, a property condition assessment and a Phase I environmental site assessment. These are borrower-paid and largely non-refundable once ordered. Title commitment, survey, insurance evidence or a bindable quote, and lender legal review complete the closing file.

Benefits

Financing matched to the acquisition rather than a generic refinance product
Permanent, bridge, and owner-occupied structures available
Loan sizing based on the property's income and appraised value
Entity borrowing is standard
A structured scenario review can surface problems before the inspection period ends

Limitations and risks

Contract deadlines may be shorter than commercial diligence takes
Appraisal below contract price reduces the loan and increases cash needed
Third-party reports and lender legal review add cost and time
Transitional properties may need a bridge rather than permanent debt
A missing financing contingency can put the deposit at risk

Example Transaction (Illustrative and Hypothetical)

Hypothetical illustration — not a real transaction

This example is hypothetical and is not a quote or a real transaction. An investor contracts to buy a 16-unit apartment building for $2,000,000 with a 45-day inspection period and a 60-day closing. The lender orders an appraisal, which confirms the $2,000,000 value. The buyer requests a $1,400,000 loan at 70% LTV, documents the down payment and reserves, and the file clears the lender's coverage test. No rate, payment, or term is expressed or implied.

Common reasons a deal may not qualify

The appraisal comes in materially below the contract price and the buyer cannot cover the gap
The down payment source cannot be documented
The property has condition, environmental, or title issues the lender will not accept
The contract timeline does not allow for commercial diligence
The property's income does not support the requested loan

Alternative structures

Renegotiate the price if the appraisal supports a lower value
Use a bridge loan if the property needs stabilization before permanent financing
Bring additional equity to reduce the loan amount
Extend the closing or inspection period to allow diligence to finish

Related property types

Related calculators

Frequently asked questions

Should I have a financing contingency in my purchase contract?

A financing contingency protects the deposit if financing cannot be obtained, but sellers in competitive situations may resist it. The right answer depends on the deal, the market, and your risk tolerance. Discuss the contract terms with your attorney before signing; a commercial loan rarely closes as fast as a residential loan.

Can I finance the down payment?

Lenders generally require the down payment to come from documented borrower funds, and borrowed funds are scrutinized or prohibited depending on the program. Some gift funds may be acceptable with documentation. Confirm the specific rules with the lender before you rely on a funding source.

What determines the terms I am offered?

The lender sets terms after reviewing the property, the borrower, and the transaction. Property type, occupancy, net operating income, debt service coverage, leverage, loan purpose, loan size, term and amortization, recourse, prepayment structure, sponsor experience, credit, and liquidity all move the quote. Two lenders can reach different conclusions on the same file. Terms vary by lender, property, borrower, and transaction, and nothing here is a rate quote or a commitment to lend.

Have a deal that fits?

Submit a Commercial Scenario

Terms vary by lender, property, borrower, and transaction.

Information provided is for general educational purposes and does not constitute a commitment to lend. Programs, terms, rates, loan amounts, documentation requirements, and eligibility vary by lender, property, borrower, and transaction. All financing is subject to underwriting, appraisal, title review, due diligence, and lender approval.