A Step-By-Step Guide To Commercial Mortgage Application Process

mortgage application process
If you have a business and are looking to start or expand it, you will need to generate a significant amount of funding. Businesses that require funds either to start or to expand will either look towards savings or turn to investors. At this point, a commercial loan comes in your favor. Many business owners choose commercial loans for financing as they help them in various ways, like boosting sales and marketing efforts, new employee hiring, business expansion, and doing research and development.
Navigating the application process can be complex and time-consuming but by following step-by-step guidance, you will get clarity and guidance to streamline the journey towards financing your commercial property needs.

What is a Commercial Mortgage?

Commercial mortgages are ones that you obtain from a lender to buy or refinance any property to increase business revenue. Although, in comparison with residential mortgages, the market share of commercial mortgages is low, the overall value is higher.
 A commercial mortgage usually extends its funds in distinct ways: Commercial mortgages are structured to benefit both the lender and the borrower. It benefits borrowers by providing a significant amount, from property development to tax deductions. Simultaneously, it also benefits the lender by providing interest income, spreading risks through secured assets, supporting economic growth, and establishing long-term relationships to acquire or expand their real estate assets Thus, it promotes liquidity and stability within the lending institute.

Basic Facts Regarding Commercial Mortgage


Commercial mortgages usually have a long loan term, from 5 years to 20, 30, or 40 years. It’s a big financial commitment where you must understand your basic source of income and how you will manage your funds.

Repayment Rate

In the case of commercial mortgages, the interest rates are usually higher as compared to residential mortgages. Additionally, a down payment is usually high for commercial mortgages.

Credit History

Although credit history is not just a single criterion for determining your eligibility, it plays a huge role in your application process. It depicts a comprehensive picture of your business idea and business background and it also provides a sign to the lender whether it is profitable to invest in your company or not.

Usage of the Loan

All commercial mortgage interest rates are not the same; it also depends on how much you are borrowing and how you will use it. Here are some of the scenarios
  • Acquiring property.
  • Refinancing
  • Expanding business operations
  • Consolidating debt
  • Ownership transfer

Steps of the Commercial Mortgage Application Process

Applying for a commercial mortgage is a crucial step in acquiring finances for your business property. Although the process can be intricate, here are a few manageable steps presented in front of you to navigate the process efficiently.

Access Your Financial Position and Need

For this step, review the financial statement of your bank, credit history, and cash flow projections to understand your financial standing. Also, choose the scenario for which you are acquiring your loan

Check Eligibility

Before directly applying for the loan, here are a few things that you should consider.

Credit Score

A credit score is a significant factor as it depicts your creditworthiness, process of loan approval, loan approval amount, and interest rate.

Time Duration

If you have been in your business for a long time, it will describe your passion for business success, and your application can be considered for approval. 


It serves as security for the lender in case the borrower defaults on the loan. Additionally, some lenders may also ask you to give them a personal guarantee by providing savings or other personal and valuable possessions.

For example: some traditional banks require individuals to be in business for about 2 years and some online lenders will require you to be in business for about 1 year. If your start-up is at the initial stage and you are into it in less than a year, don’t worry; many online lenders will approve you after considering several other factors.

Compare Business Lending Options


Although banks offer lower interest rates for well-qualified applicants, they also offer different commercial loans.


Obtaining mortgages through lenders is increasingly common and convenient because of the advancement in technology. They provide a streamlined approach to the mortgage application approval process.


Gather Documentation

Collect all the necessary financial documents with you for an easy approval process, like         
  • Tax returns
  • Profit and loss statements
  • Balance sheets
  • Business plans
  • Business leases
  • Articles of incorporation
gather documentation mortgage

Submit Application

Submitting a commercial loan application requires providing comprehensive and accurate information to assess the viability of the loan. It involves a certain set of information that needs to be provided

Applicant Information

It includes your name and contact number.

Business Overview

Legal structure of the business, year of establishment, and ownership and management structure

Business Plan

Marketing and sales strategy of the business, target market

Financial Statement

Cash flow management

Collateral Information

Value of the collateral and its description.

Loan Amount and Purpose

It includes providing how the loan amount will be used.

Repayment Plan

It includes a proper repayment schedule and what the sources of it will be.

If you are searching for a commercial mortgage broker, your wait ends here with Alpha Mortgage. Our professionals are highly trained and will help you find the best mortgage plan for you. They will navigate through the whole process.