WHAT ARE THE COMMERCIAL LOAN REQUIREMENTS IN CALIFORNIA? (CREDIT SCORE, DOWN PAYMENT & DSCR FOR 2025)
Standard requirements: Credit score 680+ (660 for DSCR programs), down payment 20-30%, 6-12 months reserves, 1.25x debt service coverage ratio. Commercial lending surged 90% year-over-year in Q1 2025—current rates: 5.14%-6.79% conventional, 5.98%-6.43% SBA 504, 6.12%-8.5% DSCR.
Alternative programs for unique situations: Bank statement loans for self-employed (no tax returns), foreign national programs (ITIN acceptable), asset depletion for high-net-worth investors, DSCR loans for anyone who can't verify income traditionally. See if you qualify.
WHICH COMMERCIAL LOAN IS BEST? REAL EXAMPLES FOR OFFICE BUILDINGS, APARTMENTS & FIX-AND-FLIP PROPERTIES
Owner-Occupied Office ($1.2M): SBA 504 wins—$120K down (10%) vs $360K conventional. Rate: 6.1% fixed 25 years. Saves $240K in capital for business operations. Perfect for 51%+ owner-occupied properties.
Investment Apartment Building ($2.5M, 8 units): DSCR loan wins—$625K down (25%), 6.75% rate, no tax returns required. Qualifies on $18K/mo rental income alone. Perfect for self-employed investors or anyone scaling a portfolio.
Fix-and-Flip Retail ($850K + $200K rehab): Bridge loan wins—closes in 14-18 days (vs 60+ conventional), 9.5% interest-only, no stabilized occupancy required. Perfect for value-add or 1031 exchanges.
The difference: SBA 504 at 6.1% with 10% down beats conventional at 5.5% with 30% down when you need capital efficiency. DSCR beats conventional when you can't document income. Bridge beats everything when speed matters. Find your best match.
DON'T LET THE NUMBERS DISCOURAGE YOU
Important: The rates and requirements shown above are typical baseline numbers, but they change frequently based on market conditions. More importantly, we make many exceptions for unique situations that don't fit the standard boxes.
Got credit issues? Unusual property? Complex income situation? Non-traditional business structure? Let's talk about your specific deal. What looks impossible on paper often has a solution when you work with experienced commercial brokers who know the right programs and lenders.
Schedule a CallHOW MUCH DOWN PAYMENT DO I NEED FOR A COMMERCIAL LOAN IN CALIFORNIA? (COMPARE SBA 504, DSCR, CONVENTIONAL & MULTIFAMILY)
- SBA 504 (LOWEST): 10% down established businesses, 15% startups. Requires 51% owner-occupancy. Example: $1.5M property = $150K down vs $450K conventional.
- DSCR: 20-25% down standard (15% with 740+ credit, 1.4x+ DSCR). No income verification required.
- Conventional: 25-30% down investment properties, 20-25% owner-occupied. LTV tightened to 70-75% in 2025.
- Multifamily: 20-25% down agency programs (experienced investors), 15-20% HUD affordable housing.
Total cash example ($2M office, SBA 504): $200K down + $60K closing costs + $90K reserves = $350K total vs $700K conventional 30% down. This 50% capital savings is why SBA 504 volume surged in 2025. Learn more about SBA 504 loans or calculate your down payment.