Investing in commercial real estate is one of the most effective ways to build wealth, generate passive income, and grow your portfolio. But before you can close the deal on a commercial building, office, warehouse, or retail space, you need to navigate the commercial real estate loan process. While it may seem complex at first, understanding each step can help you prepare, avoid delays, and secure the funding you need.
At Fidelity Mortgage Lenders, we specialize in making this process straightforward for property investors and business owners. Whether you’re new to the market or looking to expand your portfolio, this guide will walk you through everything you need to know—from pre-qualification to closing.
What Is a Commercial Real Estate Loan?
A commercial real estate (CRE) loan is a mortgage secured by income-producing property used for business purposes, such as multifamily apartment buildings, office parks, industrial facilities, or retail centers. These loans typically involve larger sums of money than residential mortgages and come with different underwriting criteria.
While traditional banks often offer CRE loans, private lenders like Fidelity Mortgage Lenders provide a more flexible, efficient alternative for borrowers seeking speed, creative terms, and reduced red tape.
Step 1: Evaluate Your Financing Needs
Before applying for a loan, determine the purpose and scope of your investment. Ask yourself:
- Is the property owner-occupied or investment-based?
- Are you purchasing, refinancing, or constructing?
- What is your timeline and budget?
These questions will help shape the type of financing you need. Fidelity, for example, offers interest-only, fully amortized, and short- to long-term options that can be tailored to your goals.
Tip: If the property is non-owner-occupied residential or commercial, private lenders may be more accommodating than banks.
Step 2: Pre-qualification
Prequalification is often the first official step in the commercial real estate loan process. It gives you a ballpark estimate of how much you may qualify to borrow and what terms might be available.
To prequalify with a private lender like Fidelity Mortgage Lenders, you’ll typically provide:
- Basic information about the property
- A summary of your investment strategy
- An estimate of rental income and expenses
- General financials or equity in the deal
Unlike banks, private lenders usually won’t require extensive tax documentation or personal guarantees, making the process quicker and less burdensome. Fidelity does not require tax returns, bank statements, or personal guarantees. Simplicity is part of our process.
Step 3: Submit a Loan Application
Once you’ve discussed terms and received a preliminary green light, it’s time to submit a full loan application. At this stage, you’ll provide more specific details, including:
- Purchase agreement or refinance payoff information
- Rent roll (if applicable)
- Property photos or appraisal
- Ownership documents and entity info (LLC, trust, etc.)
- Property financials
Your loan officer will review the file to ensure it fits underwriting guidelines. Fidelity’s experienced team takes a practical, property-focused approach—evaluating deals based on asset value and future income potential rather than rigid credit scoring.
Step 4: Underwriting and Due Diligence
Once the application is submitted, the underwriting process begins. This includes:
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Property Valuation: A formal appraisal or broker opinion of value is conducted to verify the property’s worth.
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Title Search: Ensures clear title and identifies any liens or encumbrances.
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Environmental Reports: Phase 1 environmental assessments may be required depending on the property type.
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Financial Review: Verification of property income, expenses, and rent history, especially for income-generating assets.
The underwriting process for private lenders is typically faster and more flexible than traditional banks. Fidelity can often fund within 10 business days—though every transaction is unique.
While we’ve funded loans in as few as 3 days, we always recommend giving the process at least 7–10 business days.
Step 5: Loan Approval and Term Sheet
If the loan passes underwriting, you’ll receive a commitment letter or term sheet outlining:
- Loan amount
- Interest rate
- Amortization schedule
- Term (e.g., 5-year, 15-year, or 20-year)
- Collateral requirements
- Any applicable fees or reserves
This is your chance to review and ask questions. Fidelity offers interest-only options, 30-year amortizations due in 15, and fully amortized 20-year loans—making it easier to align payments with your cash flow.
Step 6: Escrow and Closing
Once terms are accepted, escrow is opened, and closing documents are prepared. The lender works with your escrow officer, title company, and any other professionals involved in the transaction.
At Fidelity, this part of the process is seamless thanks to our in-house escrow and servicing team. You’ll sign the final loan documents, fund the transaction, and walk away with the capital you need to move forward.
We pride ourselves on a fast, smooth closing experience with no prepayment penalties or hidden costs.
Common Questions About the Commercial Real Estate Loan Process
Q: What types of properties qualify for the Commercial Real Estate Loan Process?
A: Fidelity funds a wide range of properties, including retail, mixed-use, industrial, office, investor residential, automotive, and special purpose properties (religious facilities, schools, non-profits, etc.)
Q: Can I refinance an existing loan?
A: Absolutely. If your current lender is difficult or inflexible, we can help you refinance—even if you’ve been turned down by a bank.
Q: Do you allow creative structures like second liens or seller carry-back?
A: Yes. We support creative financing solutions that traditional lenders avoid.
Final Thoughts
The commercial real estate loan process doesn’t have to be intimidating, especially when you’re working with a private lender who understands your goals and moves at your pace. Whether you’re expanding your portfolio, refinancing an underperforming loan, or funding your next big project, Fidelity Mortgage Lenders is here to guide you every step of the way.
Our loan officers are real people who specialize in real estate, not just checking boxes. If you’re looking for flexible terms, fast funding, and reliable service, you’re in the right place.
Ready to move forward?
Contact our team today to get a quote, discuss your financing needs, or learn more about our loan programs.
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