How to Get Commercial Real Estate Loans in California

California remains one of the most lucrative commercial real estate (CRE) markets in the world, but opportunities extend far beyond the state lines. From multifamily complexes in Los Angeles to industrial warehouses in the Inland Empire or properties across the US and Canada, investing in CRE can be a game-changer. However, financing these deals requires a solid understanding of the available loan products.

Whether you are purchasing your first property or refinancing a portfolio, here is how to navigate the CRE lending landscape in California and beyond.

1. SBA 504 Loans: The Owner-Occupied Champion

If your business will occupy at least 51% of the property, the SBA 504 program is unbeatable. It offers:

• Low Down Payment: Typically just 10%.
• Long-Term Fixed Rates: 20 or 25 years.
• Loan Amounts: Up to $5.5 million (or more for certain projects).

This program is designed to help small businesses stop paying rent and start building equity.

2. Conventional Commercial Mortgages

For investment properties (where you are the landlord), traditional bank loans offer competitive rates but stricter requirements. Expect to put 20-30% down and show strong Debt Service Coverage Ratios (DSCR) of 1.25x or higher.

3. Bridge Loans: Speed and Flexibility

In a hot market like LA, sometimes speed wins the deal. Bridge loans are short-term (6-36 months) loans used to:

• Close quickly (often in 2-4 weeks).
• Renovate and stabilize a property.
• Wait for permanent financing.

While rates are higher, bridge loans allow you to secure the property and execute your value-add strategy.

How to Prepare Your Application

To get approved, you will need a complete loan package. Lenders will want to see:

• Personal Financial Statement (PFS): Showing your net worth and liquidity.
• Rent Roll & Income Statements: For the property being purchased.
• Business Tax Returns: Last 3 years.
• Property Appraisal: Ordered by the lender.

Securing the right financing is just as important as finding the right property. Working with a broker like PMF LA ensures you get the best terms for your specific project.