How Commercial Real Estate Loan Rates

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Rate and Terms

3-60 Months, Interest Only
From LIBOR + 350%*

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Current News and Information Commercial Real Estate Loan Rates

How to Make Sure You Get the Best Commercial Real Estate Loan Rates for Your Business

If you work with a lender you can negotiate affordable interest rates, but there is more to it that just scoring lower interest rates. Find out all the ways you can get the best commercial real estate loan rates here.

When you work with a lender, you can rest assured that this professional knows the ins and outs of a variety of loan types and knows how to negotiate the best rates and terms for you. When working with an expert lender, they know exactly how private money or hard money loans, short- and long-term payment structures, and all the other minute details of loan fees that you might not even be aware of.

So finding a good lender is the first tip to making sure you get the best commercial real estate loan rates for your business. But make sure you do a little of your own research and “homework” – not leaving the entire process in the hands of the lender. They are there to make money, too, remember so its best to know a little about what you’re walking into before hand. Even the most reliable and honorable lender is going to need to mitigate his own risk factors via the loan so it’s important to find out where you stand, and work with a lender you can trust.

Interest rates have a lot to do with how much you’ll be repaying for not only your loan but also the additional interest accrued over time. Interest rates can fluctuate vastly depending on your financial status and the type of loan you are seeking. Make sure you fully understand the terms of your loan as it relates to interest rates. You will also want to make sure that you understand if and what the default interest rate will be in the unfortunate situation of breach of loan agreement. In that case, the interest rate increases, and that can make it very difficult to keep up with your loan payments.

Another area of negotiation is referred to as “points.”

What are all these points really? All they are is additional fees that you will be responsible for at the loan closing. These points include closing costs, underwriting fees, foreclosure fees, late fees and any other “hidden” fees that you may be responsible for. It’s a good idea to ask your lender about any and all fees when you are discussing commercial real estate loan rates.

When you are trying to negotiate the best commercial real estate loan rates, don’t be hasty.

The eligibility and success of your desired loan approval often lies in the hands of a reputable lender so don’t underestimate the time it takes to find a good, skilled professional that you feel good about working with. Ask questions and don’t be afraid to “shop around” for other lenders if you don’t get a good feeling about one. Your loan will have a large impact on the growth and development of your company – and that should not be taken lightly by you or your lender.

The Real Deal With Commercial Real Estate Loan Rates

One of the most confusing aspects of property investment opportunities is how rates and terms are put together for different borrowers. There are a number factors that impact commercial real estate loan rates and it is important to understand how each element plays into the overall calculation of terms and rates.

Not only is each lender that deals with real estate investing slightly different, but each loan is also going to be different, as there are just as many factors that play into a loan as there are in selecting a lender. When it comes to commercial real estate loan rates, it truly does depend on each individual borrower and lender, but there are certain common aspects that go into each calculation.

The first, and most obvious, factor in determining the rate of a loan is the credit score of the borrower. Now, please note that this does not include hard money loans, that are an entirely different topic altogether, as they do not operate off of credit, but rather the value of assets. However, with a traditional lender, the commercial real estate loan rates will vary depending on how high your credit score is. In many cases, with traditional lenders, if your score is too low, you will not be able to get a loan at all. If you are able to qualify for a loan with a traditional lender, the higher your credit score will translate to a lower interest rate on the loan.

The size of the loan and the type of the loan also factor in to the rates that a borrower will receive. There are many different types of loan with varying rates for qualified borrowers. From government loans to commercial bank loans, the beginning rates are different. Typically, loans that are acquired through the Small Business Administration (SBA) have lower rates and more equitable terms than those through a bank. The government heavily secures a majority of these loans and so the lenders know that they will be able to recuperate loss if something were to go awry. This allows them to offer lower commercial real estate loan rates because it lowers the risk for the lender.

When it comes to loans, contrary to popular belief, size does matter. For the most part, the longer the term for the loan, the higher the rate is going to be. Typically, this is built into the monthly payments and spread out over the term of the loan. With long term loans, there is also usually a penalty for pre-payment. This penalty is commonly based on a percentage of the remaining balance at the time of payment.

But what about the market rates? How does this effect commercial real estate loan rates?

Commercial loans are tied to the overall performance of the market. As the prime interest rate goes up, so will the interest rate of a commercial loan. Most lenders base their percentage as an increase over the prime rate. For example, if the prime rate is 4% and a bank is 1.5% over prime, the interest rate on your loan is going to be 5.5%. This creates the possibility that your interest rate will rise or fall over the term of the loan. The exception to this are commercial real estate loan rates that are considered fixed.

Equal Housing Opportunity.

*APR varies from 3.5 – 14.5%. Your loan rate and how you can borrower is primarily determined by the quality and value of the collateral, your ability to pay, total loan to value and credit score.

This is not a Good Faith Estimate (GFE) and should not be considered as such. Costs, rates and terms can only be determined after completion of a full application. Mortgage rates could change daily. Actual payments will vary based on your individual situation and current rates. To get more accurate and personalized results, please call (623) 582-4444 to talk to one of our licensed mortgage experts. Terms and conditions of this and all loan programs are subject to change without notice. Level 4 Funding LLC is licensed in the State of Arizona, NMLS 1018071 AZMB 0923961. For More Information Click Here


Dennis Dahlberg Broker/CEO/RI

Commercial Real
Loan Rates Estate

Lending for Commercial Development
Commercial Loans - 12 to 60 months
From LIBOR+350*