California Commercial Real Estate Loans
Westpark Loans arranges purchase, refinance, and cash-out financing for commercial property across California, from owner-occupied buildings to investment assets. Westpark Loans is a licensed California mortgage broker, so a file is shopped to the lenders whose programs actually fit the property rather than pushed into a single in-house product.
Commercial financing is evaluated differently than a home loan. Lenders typically look at the property’s net operating income and debt service coverage in addition to the borrower’s personal financial profile. A property that produces stable income can often qualify even when the borrower’s personal tax returns show significant deductions, which is one reason self-employed owners often turn to commercial financing.
Apartment properties of five units or more are handled as Multifamily and Apartment Loans.
What Is a Commercial Real Estate Loan?
A commercial real estate loan is financing secured by income-producing or owner-occupied business property rather than by a home. Office buildings, retail centres, industrial and warehouse space, mixed-use buildings, self-storage, and the building a business operates out of all fall under it.
The underwriting question is different too. A residential lender asks what the borrower earns. A commercial lender asks what the building earns, how reliably, and whether that income covers the payment with room to spare.
COMMERCIAL LOAN QUALIFICATION GUIDELINES
The descriptions below are general and based on typical transactions. They are not a loan offer, a rate quote, or a commitment to lend. Actual terms depend on the property, the borrower’s financial profile, and underwriting at the time of application.
Typical parameters may include:
- Property types: office, retail, industrial and warehouse, mixed-use, self-storage, and owner-user commercial buildings.
- Loan purposes: purchase, rate-and-term refinance, cash-out refinance, and bridge financing for transitional properties.
- Recourse and non-recourse: both structures may be available depending on the lender, the program, and the property’s cash flow. Non-recourse options are more common on larger, stabilized, income-producing assets.
- Entity borrowers: LLC and corporate borrowers are routine. A personal guaranty from the principals may still be required.
PROGRAM STRUCTURE
Commercial loan structures may include:
- Purchase financing to acquire a new commercial property.
- Rate-and-term refinance to replace an existing loan, often to improve terms or extend a maturity.
- Cash-out refinance to draw equity out of a property already held, typically for a business purpose, a renovation, or another acquisition. The equity available depends on the property’s current value and income.
- Bridge financing for a transitional property that is not yet stabilized, with a defined path to permanent financing.
COMMERCIAL LOAN TERMS
Typical loan parameters may include the following. Guidelines vary by lender, property, and borrower profile.
| Feature | Details |
|---|---|
| States Allowed | California focus; other states program dependent |
| Lien Position | 1st Position |
| Loan Type | Commercial real estate purchase, refinance, or cash-out |
| Loan Term | Varies by program; 5, 7, and 10 year structures common |
| Amortization | Commonly 25 or 30 years; interest-only periods program dependent |
| Recourse | Recourse and non-recourse both possible; property dependent |
| Qualifying Basis | Net operating income and debt service coverage, plus borrower profile |
| Borrowing Entity | LLC or corporation routine; personal guaranty may be required |
| Property Types | Office, retail, industrial, warehouse, mixed-use, self-storage, owner-user |
| Third-Party Reports | Appraisal, environmental review, property condition assessment typical |
| Prepayment Penalty | Common on commercial programs; structure varies |
| Closing Time | Longer than residential; driven by third-party reports and file readiness |
WHO THIS IS FOR
Commercial financing is commonly used by:
- Business owners purchasing the commercial building they operate from
- Real estate investors buying or refinancing office, retail, or industrial property
- Self-employed borrowers who want to finance through an LLC or corporation
- Owners looking to pull cash out of an existing commercial property
- Investors transitioning out of a short-term bridge loan into longer-term financing
PROCESS OVERVIEW
Initial consultation and property review
Rent roll, operating statements, and entity documents collected
Preliminary structure and lender selection
Appraisal, environmental review, and property condition assessment ordered
Underwriting and lender approval
Documents, funding, and close
Commercial loans typically involve more documentation and more third-party reports than a residential loan. Timelines vary by property type and by how quickly documentation and third-party reports come together. Many transactions move efficiently when a borrower has financials and property information ready in advance. No specific timeline can be promised for any individual transaction.
Important Considerations
- Third-party reports add cost and calendar time that a residential loan does not carry
- Prepayment structures are common and can be significant on an early payoff
- A personal guaranty may be required even where the borrower is an entity
- Vacancy, lease rollover, and tenant quality all affect what a lender will size
- Owner-occupied and investment property are underwritten to different standards
Commercial vs Multifamily vs DSCR: Which Loan Fits the Property?
These three sit next to each other and get confused constantly. A commercial loan is for business-use property — office, retail, industrial, mixed-use, or the building a business operates from. A multifamily loan is for an apartment property of five units or more, which is commercial by definition but underwritten on residential rents. A DSCR loan is a residential investment product for one to four units. The property decides, not the borrower.
| What matters to you | Commercial loan | Multifamily loan | DSCR loan |
|---|---|---|---|
| Property | Office, retail, industrial, mixed-use, owner-user | Apartments, 5+ units | Residential 1–4 units |
| Qualifies mainly on | The building’s income plus the borrower’s profile | The property’s net operating income | The rental property’s income vs its payment |
| Borrowing entity | LLC or corporation routine | LLC, LP, or corporation standard | LLC common, individual also fine |
| Third-party reports | Appraisal, environmental, property condition | Appraisal, often environmental | Appraisal |
| Typical use | Buy or refinance a business-use building | Buy, refinance, or reposition an apartment building | Buy and hold a rental |
| Owner-occupied allowed | Yes, and common | Rarely relevant | No, investment only |
Not sure which one your property falls under? That is a five minute conversation, and it is worth having before an application goes anywhere.
Frequently Asked Questions
Yes. Business owners purchasing or refinancing the building their business operates from are a common borrower type for this product.
Yes, and it is common. Depending on the lender and program, the principal owners may still need to sign a personal guaranty.
Personal credit is typically still a factor, but many commercial programs weigh the property’s cash flow more heavily than a residential loan would weigh a borrower’s personal income alone.
Typically entity formation documents, recent property financials or a rent roll, copies of any leases, a personal financial statement, and basic information about the property.
Longer than a residential loan, because of the third-party reports. The variable that moves it most is how quickly financials, leases, and entity documents come together. No specific timeline can be promised for any individual transaction.
Yes. Most commercial programs carry some prepayment structure. It is worth understanding before you sign, particularly if you expect to sell or refinance within the first few years.
COMMERCIAL LOAN EXAMPLE
A general contractor had leased the same Anaheim warehouse for eleven years and the landlord finally offered to sell. His tax returns showed very little income after deductions, and two banks had already passed on the file for that reason.
Structured as an owner-user commercial purchase, the underwriting leaned on the business’s operating results and the building itself rather than on his adjusted gross income. He now owns the building his business runs out of, and the payment is close to what the rent had been.
Illustrative example. Not a loan offer, a rate quote, or a commitment to lend.
Client Testimonials
Ready to Finance Your Commercial Property?
Work with a broker who compares lenders and structures commercial capital around the building — not generically.
Broker Advantage Statement
Not every commercial loan program is the same. As a mortgage broker, Westpark Loans compares lenders to structure the right solution based on your property, its income, your entity, and how long you intend to hold it.