When you are low on cash as a CRE investor, knowing how to buy commercial property with no money down becomes a survival skill.
Some options to consider in this situation include seller financing, lease-to-own, and cash substitutes, among others.
Interestingly, some private lenders and financing companies can also offer you a CRE loan even with no down payment. In this article, we will consider five of them and what makes them unique.
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Duckfund
Duckfund is a CRE financing firm that offers soft deposit financing as well as debt and equity financing for the property’s purchase price.
Best known for
Duckfund is best known for quick disbursal of funds.
Key features
- No collateral for EMD financing: You can secure earnest money deposit loans without collateral.
- Fast application process: The application process can be completed within two minutes.
- Quick funds disbursal: After approval, funds can be disbursed within 48 hours.
Ideal for
Duckfund is ideal for investors who are operating in competitive markets.
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Private Capital Lenders
Private Capital Lenders is a private lending firm that provides alternative and creative financing solutions to real estate investors. They also offer no-down-payment loans for investors who qualify.
Best known for
Private Capital Lenders is best known for its creative financing solutions.
Key features
- Collateralized loans: They can accept collateral from existing assets instead of a down payment.
- Flexibility: Investors can negotiate favorable loan terms.
- Fast approval: Funds are quickly released in days.
Ideal for
Investors who want flexible loan terms.
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Green Commercial Capital
Green Commercial Capital is an SBA lender. It offers 100% LTV SBA 7(a) and 504 loans to investors who meet its conditions.
Best known for
Green Commercial Capital is best known for offering flexible loan structures under SBA programs.
Key features
- Only for owner-occupied property: Since this is an SBA loan, at least 51% of the property must be owner-occupied.
- Requires strong credit history: The business owner must have a good credit history (680+), and the business must have generated strong cash flows in the past 1 to 1.5 years. They also require a debt service coverage ratio (DSCR) of 1.1-1.25x.
- Lower interest rate than private lenders: Given that SBA loans are partially guaranteed by the government, the interest rate on them is lower than what private lenders charge.
- Flexibility: Investors can use these loans for single-purpose and multi-purpose properties.
Ideal for
Green Commercial Capital is ideal for investors who can refinance owner-occupied properties into investment properties down the line.
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Builder Finance
Builder Finance is a private lender that provides construction loans for investors, developers, and builders.
Best known for
Builder Finance is best known for financing investors involved in ground-up construction projects.
Key features
- Low rates: They boast of lower rates than hard money lenders.
- Customer support: Every borrower gets a dedicated representative.
- Same-day draw funding: You can request funds for project expenses and get them the same day.
- Term length: Loan terms can be up to 5 years.
Ideal for
Builder Finance is ideal for developers involved in ground-up projects.
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Cornovus Capital
Cornovus Capital is an SBA lender, offering financing solutions to real estate businesses. They also offer a 100% financing solution, subject to certain conditions.
Best known for
Cornovus Capital is best known for its nationwide reach.
Key features
- Only for owner-occupied property: Since this is an SBA loan, at least 51% of the property must be owner-occupied.
- Collateral: Business assets and real estate can be used as collateral.
- Loan size: Up to $5 million available.
- Requires strong cash flow history: The business must have generated strong cash flows in the past.
Ideal for
Cornovus Capital is ideal for investors who can refinance owner-occupied properties into investment properties.