How Do You Buy a Commercial Property with 100% Financing?

By Benjamin Ficker

Benjamin Ficker is a Multifamily Investment Broker with KW Commercial. With a two-decade career, he delivers unparalleled value and personalized service to clients, earning trust as a reliable advisor. His broad spectrum of experience has led to success for hundreds of his clients.

Buying commercial real estate without a down payment might sound too good to be true. But it’s possible with the right approach. If you know where to look and how to qualify, you can secure 100% financing for your property. Let’s go over three ways to make it happen. This guide outlines practical methods to secure 100% financing for your commercial real estate investment.

1. Use SBA 7(a) Loans. One of the best ways to buy commercial property with no down payment is through an SBA 7(a) loan. This loan program, backed by the Small Business Administration (SBA), lets you finance up to 100% of the property if your business will use at least 51% of it. You’ll need good credit, a stable business, and a debt service ratio that shows you can pay back the loan. Plus, the SBA loan can even cover construction costs if you’re building from the ground up.

2. Look Into Seller Financing. Seller financing is another option where the seller acts as the lender. Instead of going through a bank, you’ll make payments directly to the seller. This option can be more flexible, and in some cases, you might not need a down payment. If the seller is motivated, you might even get a great deal. It’s a good idea to negotiate the terms carefully, so you both get what you want.

3. Try Lease-to-Own. Lease-to-own agreements allow you to rent the property with the option to buy it later. Some of your rent payments might even go toward the purchase price. This can be a great way to get into a property while you work on your credit or get financing lined up. Make sure to carefully review the lease agreement to understand how much of your payments go toward the final purchase.

You don’t need a huge down payment to buy commercial property. With SBA 7(a) loans, seller financing, and lease-to-own options, you can secure financing and get started on your investment. Take time to explore these options and figure out which one works best for your situation.

Ready to dive into commercial real estate without the down payment? Reach out to a real estate expert or lender to discuss your options and see if you’re eligible for any of these financing methods. The sooner you start, the sooner you can own your property!