Commercial real estate loans are financing tools used to purchase, refinance, or develop income-producing properties. This includes apartment complexes, office buildings, retail centers, industrial warehouses, and ground-up construction projects. Deals typically range from $1M to $50M+.
But here’s the problem most investors hit: banks move slowly, require near-perfect documentation, and decline anything that doesn’t fit inside a rigid checklist. By the time a bank gives you an answer, the deal is gone.
Nelson Funding is a commercial mortgage broker, not a bank. That distinction matters. We don’t lend by a rulebook. We work with 50+ lenders across the country and structure financing around your specific deal. We’ve closed transactions from a $1.1M ground-up build in Virginia to a $70.2M luxury community in Park City, Utah.
This guide covers every major commercial loan type, how the funding process actually works, and what it takes to get a deal closed — even after a bank has said no.
What Are Commercial Real Estate Loans?
Commercial real estate loans are financing used to purchase, refinance, or develop income-producing properties. Unlike residential loans, approval is based on how much income the property produces and the strength of the deal — not just the borrower’s credit score.
Unlike a home mortgage, a commercial loan is built around the deal’s economics. The core question lenders ask: does this property produce enough income to service the debt?
What Qualifies as Commercial Real Estate?
- Multifamily properties (5+ units)
- Office, retail, and mixed-use buildings
- Industrial, warehouse, and flex space
- Hotels and hospitality properties
- Land and ground-up construction projects
- Single-tenant net lease (NNN) properties
- Luxury spec homes and residential communities
If a property generates income — or is being built to generate income — there is likely a commercial loan product designed for it.
Types of Commercial Real Estate Loans
There are five main types of commercial real estate loans, each designed for different timelines, property conditions, and exit strategies.
Bridge Loans
Bridge loans are short-term financing solutions, typically 12 to 36 months, designed to close fast and ask fewer questions than a traditional bank. They bridge the gap between where you are now and your long-term plan.
- Best for: quick acquisitions, value-add properties, transitional assets
- Timeline: Can close in as little as 7–14 days
- Loan-to-value: Typically up to 70–75%
- Recent example: $3,425,000 bridge loan on a luxury estate in Holladay, UT
Construction Loans
Construction loans fund ground-up builds and major redevelopment projects. Funds are released in stages (called draws) as construction milestones are hit. These are complex loans that require experienced structuring to execute properly.
- Best for: residential developers, commercial builders, spec home projects
- Funding is draw-based and aligned to construction progress
- Recent example: $5,060,000 for a 14-home subdivision in Concord, CA
- Recent example: $70,200,000 for the Wakara luxury SFR community in Park City, UT
Permanent Loans
Permanent loans are long-term, stabilized financing — the commercial equivalent of a 30-year mortgage. Once a property is performing and occupancy is stable, a permanent loan locks in lower-rate, long-term financing.
- Best for: stabilized multifamily, office, retail, and NNN properties
- Terms: 5, 7, or 10-year fixed; 15–30 year amortization
- Ideal exit strategy for bridge or construction loan borrowers
Hard Money Loans
Hard money loans are asset-based. Approval centers on the collateral, not the borrower’s credit history or income documentation. They are the fastest and most flexible loan type available.
- Best for: fix-and-flip, quick acquisitions, borrowers with credit challenges
- Timeline: Can close in days
- Higher rates in exchange for speed and minimal documentation
SBA Loans (504 & 7a)
SBA loans are government-backed financing for business owners purchasing or improving owner-occupied commercial real estate. Lower down payments, competitive rates, and longer terms make them attractive for small business owners.
- 504 Loan: Up to 90% LTV for owner-occupied commercial properties
- 7(a) Loan: Flexible use across real estate, equipment, and working capital
- Best for: business owners buying their own building
When Banks Say No: Why Serious Investors Come to Nelson Funding
When a bank declines your deal, it does not mean the deal is bad. It usually means your deal does not fit their checklist. Nelson Funding works with 50+ lenders who are built for exactly those situations.
Traditional banks turn down more commercial deals than they approve. Most of those rejections have nothing to do with whether the deal is actually good. Banks are built for predictability. Real estate investment is not always predictable.
“When banks say no, we find a way. Every deal is different. Our job is to understand your situation, find the right lender, and make it happen.” — Dylan Nelson, Nelson Funding
Why Banks Decline Strong Deals
- Banks take 60 to 90 days minimum. Investors lose deals waiting.
- Unique or transitional properties get flagged or declined outright.
- Credit challenges stop applications before they reach underwriting.
- Value-add deals do not fit traditional underwriting. Banks fund today’s performance, not tomorrow’s potential.
- Complex deal structures — joint ventures, entity ownership, creative financing — confuse traditional lenders.
The Nelson Funding Difference
Dylan Nelson built Nelson Funding on a simple belief: good deals deserve to get funded, regardless of whether they fit a bank’s checklist. He grew this business from the ground up — no shortcuts, no handouts — by building relationships and delivering results that speak for themselves.
- 50+ lender relationships across private funds, debt funds, and institutional capital
- Dylan personally has eyes on every deal. Nothing falls through the cracks
- A team that has been in the industry for years, not months
- Speed that banks cannot match. Bridge loans close in 7–14 days
- Creative structuring for deals that don’t fit a standard mold
“My whole goal is to have people around me who know more than I do. That’s how you build something that actually works for clients.” — Dylan Nelson
How the Commercial Loan Process Works at Nelson Funding
Nelson Funding follows a four-step process: deal review, lender matching, term sheet, and closing. Most bridge loans close within 14 to 21 days. You will always know exactly where your deal stands.
Getting commercial financing should not take 90 days and three rounds of paperwork just to get a maybe. Nelson Funding’s process is built for investors who are moving fast and need straight answers.
- Deal Review: Submit your deal, property type, loan amount, timeline, and exit strategy. Most deals get a response the same day. No lengthy applications, no automated forms. A real person reviews your file.
- Lender Matching: We match your deal to the right lender from our network of 50+ capital sources. This isn’t a mass blast. It’s a targeted placement based on what your deal actually needs.
- Term Sheet and Structuring: You receive a clear term sheet: rates, fees, LTV, and timeline. We walk you through your options and help you choose the structure that fits your goals.
- Closing: Our team coordinates with attorneys, title companies, and lenders to get you to the closing table. Fast, efficient, and without surprises.
Bridge loans typically close in 14–21 days. Construction and permanent loans run 30–45 days depending on deal complexity. Either way, you’ll always know exactly where your deal stands.
Real Deals Closed by Nelson Funding
The best proof is a track record, not a pitch. These are real transactions Nelson Funding has closed. Different markets, different deal types, different levels of complexity. All funded.
| Loan Amount | Type | Location | Project |
|---|---|---|---|
| $70,200,000 | Construction | Park City, UT | Luxury SFR Community (Wakara) |
| $6,585,425 | Construction | Gainesville, TX | 81-Unit Residential Community |
| $5,060,000 | Construction | Concord, CA | 14-Home Subdivision |
| $3,425,000 | Bridge Loan | Holladay, UT | Luxury Estate |
| $1,168,871 | Construction | Boring, OR | Luxury Spec Home |
| $1,144,265 | Construction | Boydton, VA | Three-Home Ground-Up Build |
These deals range from a $1.1M ground-up build in rural Virginia to a $70.2M luxury residential community in Utah‘s Park City market. That range is not accidental. It reflects what happens when you build the right lender relationships over years and focus entirely on making deals work.
A Deal That Almost Didn’t Happen
A borrower came to us after two banks declined a $4.8M acquisition due to timeline and structure concerns. They had less than two weeks before their contract expired. We structured a bridge loan and closed in 10 days, allowing them to secure the property and execute their value-add plan.
That is not an unusual story here. It is a Tuesday. View all of our recent closings.
What Do You Need to Qualify for a Commercial Real Estate Loan?
Most commercial loans look at three things: the property, the borrower’s experience, and the exit strategy. Credit matters less than you think — especially for bridge and hard money loans.
Commercial loans do not require perfection, but they do require preparation. Different loan types have different requirements. A bridge loan looks at very different factors than an SBA loan. Not sure if your deal qualifies? Submit it — we’ll give you a straight answer within 24 hours.
Credit & Financial Background
- Bridge and hard money loans: primarily asset-based. Credit score is less critical
- Permanent and SBA loans: 660+ credit score recommended for best terms
- Prior bankruptcies or foreclosures are not automatic disqualifiers. Context matters
Cash Flow & Debt Coverage
- DSCR of 1.20–1.25x is the standard benchmark for permanent financing
- For properties being repositioned, lenders care more about future income potential than current performance
- Construction loans are based on how realistic your build plan and exit strategy are
Experience & Track Record
- Experienced sponsors attract better rates and more lender interest
- First-time investors can still get funded, especially with strong assets and a capable team
- Joint ventures pairing experienced operators with capital are common and encouraged
The Property Itself
- Location, asset type, and market fundamentals all factor into lender appetite
- Exit strategy must be realistic: refinance, sale, or lease-up
- Appraisal and environmental assessments are typically required for closing
Commercial Loans vs. Residential Loans: Key Differences
Commercial real estate loans are designed for income-producing properties, while residential loans are based on personal income and credit. With a commercial loan, lenders focus on the deal itself. With a residential mortgage, lenders focus on the borrower.
- Commercial loans: approval based on property income and deal strength
- Residential loans: approval based on personal income, credit score, and debt-to-income ratio
- Commercial loans: flexible structures, faster timelines, higher loan amounts
- Residential loans: standardized terms, longer approval process, owner-occupant focus
If you are buying a property to generate income — not to live in — a commercial loan is the right tool. Nelson Funding specializes in exactly that.
