How much down payment do you need for a commercial real estate loan?

Commercial real estate down payment typically runs 10% to 35% depending on the program and how the property is used. Owner-occupied purchases through SBA 504 can be as low as 10% ; SBA 7(a) runs 10–20%; conventional owner-occupied loans usually need 20–30%; and investment (non-owner-occupied) property generally requires 25–35%. Credit, DSCR, time in business, and property type move you within those ranges.

What is the down payment for a multifamily commercial loan?

Multifamily (5+ units) typically requires 20–30% down on conventional and bank loans. Agency loans (Fannie Mae and Freddie Mac) for stabilized properties often run 20–25%. HUD/FHA multifamily programs can go lower but take far longer to close. Stronger DSCR and occupancy push you toward the low end.

Can you use equity as a down payment on commercial property?

Often yes. Borrowers commonly fund the down payment by pulling equity from another property (cash-out refinance or a line of credit), or by pledging an additional property as collateral so the lender requires less cash — called cross-collateralization, which SBA programs allow. Seller seconds, partner equity, and properly documented gifts can also count. The catch: any new debt you take on to raise the down payment shows up in the lender’s global cash-flow and DSCR analysis, so it can affect approval.

What is the minimum down payment for commercial property?

The practical minimum for most buyers is about 10% , available on owner-occupied purchases through the SBA 504 program’s 50-40-10 structure. Some owner-occupied scenarios reach near-100% financing in narrow cases, but startups, special-use properties, and investment deals require more equity — commonly 20–35%.

Commercial Real Estate Loan Down Payment: 10–35% by Type (2026)

Q: Does your down payment count as equity?

Yes. The cash you put down becomes your initial equity in the property — the difference between the property value and the loan balance. As you pay down principal and the property appreciates, that equity grows, and you can later borrow against it through a refinance or equity line.

Quick answer

Commercial real estate loan down payment typically runs 10% to 35%, driven by how the property is used and the loan program: ~10% owner-occupied via SBA 504, 10–20% SBA 7(a), 20–35% conventional owner-occupied, 25–35% investment/non-owner-occupied, and 20–30% for multifamily (5+ units). Credit, DSCR, time in business, and property type move you within those ranges. You can sometimes fund the down payment with equity from another property rather than all cash.

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Typical Down Payment by Loan Type

Loan Type	Typical Down Payment
SBA 504	10% in many owner-occupied scenarios
SBA 7(a)	10% to 20% typical
Conventional Commercial Loan	20% to 35% typical
Investment Property / Non-Owner Occupied	25% to 30%+ common

Estimate Your Down Payment

Enter a purchase price and loan type to see an illustrative down payment and loan amount. These are estimates based on the typical ranges above, not a quote — your actual figures depend on credit, occupancy, DSCR, and the lender program.

Property purchase price Loan type

Estimated down payment

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Estimated loan amount

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Illustrative estimate only, not a quote or offer of credit.

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SBA 504 Loan (Lower Equity Option)

SBA 504 is frequently used for owner-occupied property because it can reduce upfront equity requirements for qualified businesses. The 50-40-10 structure–50% bank, 40% CDC/SBA, 10% borrower–means you can finance up to 90% of eligible project costs in many cases. Startups or special-use properties may face slightly higher equity requirements. For a full program comparison, see SBA 504 vs conventional commercial real estate loan.

10% baseline in many structures
Additional equity can apply for startups or special-use properties
Often paired with long-term fixed-rate elements

Down payment and equity for commercial property loans

SBA 7(a) Real Estate Loan

SBA 7(a) can also finance owner-occupied real estate and may include broader use of proceeds. Down payment ranges from 10% to 20% depending on profile and lender policy. SBA 7(a) real estate loans can finance acquisition, construction, or renovation. The program offers flexibility for businesses that need more than just property purchase. Compare SBA 504 vs conventional CRE loan for structural differences.

Conventional Commercial Mortgage

Conventional lenders usually require higher borrower equity but may offer strong pricing for experienced borrowers with stable cash flow. Down payment ranges from 20% to 35% depending on property type, credit, and lender. Stronger borrowers with excellent DSCR and credit may qualify at the lower end; higher-risk profiles may need 30% or more. Conventional loans do not have the same program restrictions as SBA, which can provide flexibility for certain property types. See credit score requirements for commercial real estate loans for how your profile affects equity expectations.

Investment Property Down Payment

Investment and non-owner-occupied properties typically require 25-35% down. Lenders perceive higher risk when the borrower does not occupy the space–tenant turnover, vacancy, and market volatility all factor in. Strong rent rolls, credit tenants, and long lease terms can sometimes improve leverage. For a full comparison of owner-occupied vs investment financing, see owner-occupied vs investment commercial property loans.

Multifamily (5+ Unit) Down Payment

Multifamily properties with five or more units are financed as commercial real estate, and down payments typically run 20–30%:

Conventional / bank loans: 20–30% down for stabilized properties, toward the higher end for smaller or value-add deals.
Agency loans (Fannie Mae, Freddie Mac): often 20–25% for stabilized, cash-flowing properties with experienced sponsors.
HUD/FHA multifamily: can go below 20% but takes far longer to close and suits larger, longer-hold deals.

Strong occupancy and DSCR (1.20x+) push you toward the low end; lease-up risk or weaker coverage pushes it up. For the full breakdown see multifamily loan down payment requirements.

Can You Use Equity as a Down Payment?

A common question is whether you have to bring all cash to closing or whether equity can count. Often you can use equity — through a few accepted structures:

Equity from another property: a cash-out refinance or line of credit on real estate you already own can fund the down payment. The new payment shows up in the lender's global cash-flow and DSCR analysis, so it has to pencil out.
Cross-collateralization: pledging an additional property as collateral can let a lender require less cash down. SBA programs allow this, and it can lead toward near 100% financing on owner-occupied commercial real estate.
Seller second / partner equity: a seller carryback note or a capital partner's contribution can cover part of the equity, subject to program rules on subordinate debt.
Documented gifts: acceptable for some programs when properly sourced and seasoned.

Does your down payment count as equity? Yes — the cash (or pledged equity) you put in becomes your initial ownership stake: property value minus loan balance. It grows as you pay down principal and the property appreciates. See owner-occupied vs investment financing for how occupancy changes equity expectations.

What Affects Down Payment Requirements?

Credit Score

Higher scores can improve leverage options
Moderate scores may increase reserve and equity expectations

Time in Business

2+ years operating history is preferred by many lenders
Startups may face additional equity requirements

Property Type

Office, retail, and industrial are often easier than special-use assets
Special-purpose properties can require more equity

Debt Service Coverage Ratio (DSCR)

Stronger DSCR can support better leverage
Weak DSCR usually increases required borrower contribution

Lenders target DSCR of 1.20x-1.35x or higher. Improving DSCR before applying can reduce equity requirements. See what lenders look for for the full underwriting checklist.

Can You Finance the Down Payment?

In some structures, portions of required equity may come from business reserves, partner contributions, or acceptable subordinate support. Most lenders still expect meaningful borrower cash at closing. Gifts from family members may be acceptable for certain programs if properly documented. SBA programs have specific rules about equity sources; work with your lender to ensure your down payment structure meets program requirements. See what lenders look for in a commercial real estate loan for equity and liquidity expectations.

Closing Costs and Reserves

Beyond the down payment, budget for closing costs–appraisal, environmental reports, title insurance, legal fees, and lender fees. Lenders may also require post-closing reserves (typically 6–18 months of debt service) to be held in liquid accounts. Factor these into your total capital needs when planning a commercial property purchase. Use our loan calculator to model payment scenarios and ensure you have adequate reserves.

Example Scenario

For a $1,000,000 owner-occupied property, down payment ranges significantly by program. SBA 504 at 10% would require $100,000; conventional at 25% would require $250,000. The difference in equity requirement can determine whether you can move forward. Use our loan calculator to model payments at different loan amounts. For a $1,000,000 owner-occupied property:

10% down = $100,000
20% down = $200,000
30% down = $300,000

Actual structure depends on lender guidelines and credit profile. Property type also matters–special-use assets like churches, car washes, or medical facilities may require higher equity than standard office or retail. Discuss your specific property and profile with lenders to confirm down payment expectations before making offers.

Minimum Loan Amount

Commercial real estate programs generally begin around $10,000 and scale with property value and qualification.

How to Strengthen Your Position

If you are short on equity, focus on building reserves and improving your financial profile. Pay down business and personal debt to free up cash flow. Strengthen DSCR through revenue growth or cost reduction. Improve credit to access programs with lower equity requirements. Consider phased acquisitions–buy a smaller property first, build equity, then trade up. See what lenders look for in a commercial real estate loan for the full underwriting checklist.

Maintain strong operating reserves
Improve DSCR through cleaner financial reporting
Reduce short-term revolving debt
Stabilize business cash flow consistency

Next Steps

Estimate your equity needs based on your target program and property type. Budget for down payment, closing costs, and reserves. Compare commercial real estate loan options and get matched with lenders to find programs that fit your capital position.

Final Thoughts

Most owner-occupied CRE buyers should expect 10% to 35% down, depending on loan structure, profile strength, and property risk. SBA 504 often offers the lowest equity requirement at around 10%; conventional loans typically need 20-30% or more. SBA programs can reduce initial equity in the right scenario, while conventional financing usually requires higher borrower contribution. Review current commercial real estate loan options and related lender criteria before applying.