How to Qualify for a Commercial Property Loan with Bad Credit
- Nate Jones, CPCU, ARM, CLCS, AU
- Oct 15
- 2 min read
Securing a commercial property loan with bad credit may seem impossible—but it’s not. Many investors with credit scores below 650 successfully finance office buildings, retail centers, warehouses, and multifamily properties by using alternative lenders and smart strategies.
Here’s how to qualify and protect your investment.
What Is Considered Bad Credit in Commercial Lending?
In commercial real estate, a credit score below 600 is typically considered poor. Even scores between 600–650 may trigger additional scrutiny, especially for high-risk asset classes like hospitality or retail.
But lenders don’t just look at your score—they also evaluate:
Business cash flow and profitability
Collateral and property value
Loan Options for Borrowers with Bad Credit
Asset-based loans that focus on property value, not credit. Ideal for short-term deals or fix-and-flips. Expect higher interest rates and shorter terms.
Funded by individuals or private groups. Terms are negotiable, and credit checks may be minimal.
3. CMBS Loans:
Commercial mortgage-backed securities pool loans and sell them to investors. These may offer more flexibility than traditional banks.
4. Portfolio Loans:
Offered by local banks that keep loans in-house. More flexible underwriting and credit tolerance.
5. Partnering:
Team up with a creditworthy partner to improve eligibility and share risk.
Tips to Improve Your Approval Odds
Offer a larger down payment (20–30%) to reduce lender risk
Show strong property cash flow or rental history
Set up an LLC to separate personal credit from business operations
Prepare a solid business plan with financial projections and exit strategy
Avoid frequent credit inquiries before applying
Protect Your Financed Property with Wexford Insurance
Once you secure financing, protect your investment with Wexford Insurance. We offer tailored coverage for Apartments, office buildings, retail centers, warehouses, hotels, and mixed-use buildings
Lessors risk insurance for leased properties
Business interruption coverage
Optional add-ons like flood, cyber, and ordinance coverage
Final Thoughts
Bad credit doesn’t mean you can’t invest in commercial real estate. With the right lender, strategy, and insurance partner, you can secure financing and build long-term wealth. Contact Wexford Insurance today to protect your property and cash flow.
FAQs
1. Can I get a commercial loan with a credit score under 600?
Yes—through hard money, private lenders, or CMBS loans, depending on the deal structure.
2. Will lenders consider my business income instead of personal credit?
Many do. Strong DSCR and cash flow can offset poor personal credit.
3. Does Wexford Insurance cover properties financed with bad credit loans?
Absolutely. Wexford provides full coverage regardless of financing method.