How Commercial Real Estate financing works
Commercial real estate financing for operating businesses is typically evaluated on the strength of the business's cash flow, the property's value, and the borrower's equity. SBA programs are designed for owner-occupied property — the operating business must use a majority of the space.
The right structure depends on your down payment, whether the request includes renovation or equipment, the property type, and lender appetite. Conventional commercial mortgages may also be appropriate for some borrowers.
Common business uses
- Purchasing an owner-occupied building, office, warehouse, or retail property
- Ground-up construction for your operating business
- Renovation, expansion, or tenant improvements
- Refinancing existing owner-occupied real estate debt, where eligible
General eligibility considerations
- The operating business occupies the required portion of the property (generally 51% for existing buildings under SBA programs)
- Business cash flow supports the proposed debt
- Sufficient equity contribution for the program and property type
- Acceptable appraisal and, where required, environmental review
Documentation lenders typically request
- Business federal tax returns (typically the most recent three years)
- Personal federal tax returns for owners with significant ownership
- Year-to-date profit and loss statement and balance sheet
- Personal financial statement for each owner
- Business debt schedule listing current obligations
- Business formation documents and ownership structure
- Résumés or management background for key principals
- Purchase and sale agreement
- Property details, rent roll (if any tenant space), and current lease if applicable
- Construction plans, budget, and contractor information for construction or renovation
Requirements vary by lender and program. Please do not send tax returns or other sensitive documents through our website form — we will provide a secure method when documents are needed.
The role Sapphire Holdings plays
- Help compare SBA 7(a), SBA 504, and conventional approaches for your project
- Organize project costs and a clear sources-and-uses summary
- Help prepare your business and property information for lender review
- Help coordinate third-party reports and lender requests
Sapphire Holdings is not a lender and does not make credit decisions. The lender independently determines eligibility, rates, terms, and approval.