Introduction

“Every dollar spent on rent is a dollar that doesn’t build equity.”

If you’re a small business owner still leasing your commercial space, it’s time to ask a tough question: Are you missing out on long-term wealth by not owning your location? Conventional commercial real estate (CRE) loans offer a smart path to ownership. And with the right financing structure, you could build equity, control your space, and potentially pay less than you’re spending on rent.

Let’s break down what conventional CRE loans are, how they work, and whether now is the time to make the leap.

What Is a Conventional Commercial Real Estate Loan?

A conventional commercial real estate loan is exactly what it sounds like: a loan issued by a traditional lender like a bank or credit union, not backed by the federal government.

Key features:

• Funded by private institutions
• Typically requires 20–30% down
• Fixed or variable rates
• Amortization periods of 15–25 years

These loans work well for businesses with steady cash flow and solid credit that are looking for fast, flexible financing without government program restrictions.

How Conventional CRE Loans Work for Business Owners

If you’ve been renting your storefront, office, or warehouse, a conventional loan can help you buy that property outright—or purchase a new one.

Here’s how they typically look:

• Down payment: 20–25%
• LTV: Up to 75–80%
• Rates: Generally lower than SBA 7(a) loans, but higher than SBA 504
• Closing speed: Often faster than SBA loans

Bonus: you get complete control over your space—no more rent hikes or restrictive leases.

Conventional vs SBA 504 Loans: Which is Right for You?

Let’s compare.

Feature	Conventional CRE Loan	SBA 504 Loan
Down Payment	20–25%	As low as 10%
Interest Rate	Competitive	Below-market fixed
Approval Time	Faster	Longer
Flexibility	More	Less
Government Guarantee	No	Yes

If you need a low down payment and are okay with a slower process, SBA 504 might work. But for speed and flexibility, conventional is often the better fit.

What Lenders Look for (And How to Prepare)

Want to improve your approval odds? Here’s what matters:

• Credit Score: Aim for 680+
• Cash Flow: Show steady revenue
• Business Plan: Demonstrate long-term viability
• Property Details: Type, location, condition

Be ready with tax returns, financials, rent rolls (if applicable), and a purchase contract.

Can I Use a Conventional Loan to Refinance or Expand?

Absolutely. Many borrowers use conventional loans to:

• Refinance out of SBA loans
• Pull out equity for renovations
• Purchase adjacent properties
• Consolidate high-interest debt

If you’re sitting on a property that’s appreciated, you might be able to cash out without disrupting your business.

Are You Overpaying for Rent? Let’s Do the Math

Let’s say you’re paying $9,000/month in rent. That’s $108,000/year—or over $1 million in a decade.

If you bought a $1.5M property with 25% down and a 6.5% fixed rate, your mortgage (including taxes and insurance) might be around $8,200/month. That’s less than rent—and you’re building equity.

Bottom Line: It’s Time to Explore Ownership

Conventional CRE loans can unlock big advantages:

• Equity building
• Predictable costs
• Greater control

If your business is stable, you’ve got decent credit, and you’re tired of paying someone else’s mortgage, now might be the time to act.

Ready to Take the Next Step?

We help business owners across the country secure financing to own their commercial space. Let’s review your options and run the numbers—no pressure, just clear answers.