Your deal is too big for a residential rental loan and too small for the big commercial desks. That middle range is exactly where small-balance commercial financing fits.
In short: Small-balance commercial loans are financing for income-producing commercial buildings in roughly the $500K to $5M range, and LendingStreet finances them for investors on custom terms, with larger loans possible. They cover small office, retail, flex, light industrial and mixed-use properties held as investments. Approval leans on the property’s income and your track record more than personal tax returns. Our programs are business-purpose and non-owner-occupied only.
There is no single official cutoff. In practice, small-balance commercial means loans large enough to need commercial underwriting but small enough that many large institutional lenders pass on them.
Typical deals are a 6,000 square foot office building, a three-bay retail strip, a small flex warehouse with two tenants or a downtown mixed-use building. Most are owned by individual investors or small partnerships through an LLC.
Community banks do make small commercial loans, but they usually want a deposit relationship, personal tax returns, a personal guarantee with global cash flow analysis and sometimes recourse to other assets. Approval can take weeks.
Investors who own several properties, show low taxable income because of depreciation, or need to move quickly often fit poorly with that process. Investment property programs focus on the building itself.
| Factor | Typical bank approach | Investor-focused program |
|---|---|---|
| Main approval driver | Personal and business tax returns | Property income and borrower experience |
| Deposit relationship | Often expected | Not required |
| Timeline | Commonly several weeks or more | Built for faster closings |
| Borrowing entity | Varies | LLC borrowing standard |
Example only, not a quote. An investor is buying a two-tenant office building for $950,000. One tenant pays $4,200 a month on a lease with three years left. The other pays $3,300 a month with 18 months left.
Gross rent is $90,000 a year. The leases are modified gross, so the owner pays taxes, insurance and common repairs, assumed at $28,000 a year plus a 5% vacancy reserve of $4,500. Net operating income is about $57,500, which supports an assumed $665,000 loan with roughly $50,000 in annual payments at about 1.15x coverage.
| Line | Example amount |
|---|---|
| Purchase price | $950,000 |
| Gross rent | $90,000 / yr |
| Owner-paid expenses | -$28,000 / yr |
| Vacancy reserve (5%) | -$4,500 / yr |
| Net operating income | $57,500 / yr |
| Assumed loan (70%) | $665,000 |
| Assumed annual debt service | About $50,000 |
Small-balance commercial loans are priced deal by deal. A few factors move terms more than anything else.
Lease term matters because a tenant leaving in six months is a real risk to the income. Tenant mix matters because one tenant in a single-tenant building is all-or-nothing. Your experience owning similar property also counts.
Small-balance commercial financing works for purchases, rate-and-term refinances and cash-out refinances on buildings you already own. Cash-out is common when an investor owns a small building free and clear and wants capital for the next acquisition.
If the building is partly vacant or needs work, a short-term bridge loan may fit better first. Once it is leased, a longer-term loan replaces the bridge.
Send the rent roll, copies of each lease, the last 12 to 24 months of operating statements, the purchase contract if buying and a short summary of your experience. Photos help too.
As an investment property financing company with relationships across 30+ capital sources, we typically bring back 2–3 options, often within 48 hours. Your loan officer will walk you through the trade-offs between them.
Our commercial and mixed-use programs typically start around $500K. Smaller deals on 1–4 unit residential rentals usually fit our DSCR programs, which start at $150K.
Our commercial programs are underwritten mainly on the property’s income and your experience, not your personal tax returns. You still provide property operating statements, leases, credit and entity documents.
Guarantee requirements vary by program and deal. Many investor commercial loans include a guarantee from the principals, and your loan officer will explain what each option requires before you choose.
No. LendingStreet finances investment property held for rent to tenants. An owner-user building where your business occupies the space is outside our programs.
It depends on the property, the leases and third-party reports. Commercial deals usually take longer than residential rentals, but a complete document package up front is the biggest thing you can do to shorten the timeline.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
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