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Financing Options for Commercial Real Estate in Riverside, CA

Writer's picture: Bobby MendezBobby Mendez




Buying a commercial building in Riverside, CA is an exciting opportunity, but let’s face it—it can also be a bit overwhelming. One of the biggest hurdles? Financing. But don’t worry! With the right strategies and support, you can secure the funds you need to turn your commercial real estate dreams into reality. At Bobby Mendez Realty, we’re here to walk you through the process and connect you with the best options for your unique situation. Let’s break down the most popular financing options available in Riverside.



1. Traditional Bank Loans: The Classic Choice

For many investors, a traditional bank loan is the go-to option for financing commercial properties. These loans typically offer competitive interest rates and structured repayment plans, making them a reliable choice for established buyers.

Pros:

  • Lower interest rates compared to other options.

  • Predictable monthly payments with fixed-rate loans.

  • Long-term options for stability.

Cons:

  • Requires a strong credit score and financial history.

  • Higher down payment, typically 20-30%.

  • Lengthy approval process.

Pro Tip: Be prepared with all necessary documents, like financial statements, tax returns, and a solid business plan. Showing your lender you’re serious can make all the difference.



2. SBA Loans: Backed by the Government

Small Business Administration (SBA) loans are an excellent choice for small business owners looking to purchase commercial property. These loans are partially guaranteed by the government, making them less risky for lenders.

Types of SBA Loans:

  • SBA 504 Loan: Designed for purchasing fixed assets like real estate. It requires as little as 10% down and offers long repayment terms.

  • SBA 7(a) Loan: More flexible and can be used for real estate, renovations, or working capital.

Why Choose an SBA Loan?

  • Lower down payment requirements.

  • Longer repayment terms (up to 25 years).

  • Competitive interest rates.

Quick Tip: SBA loans take time to process, so plan ahead. Partnering with an experienced broker like Bobby Mendez Realty can help streamline the process.



3. Commercial Mortgage-Backed Securities (CMBS): For Larger Investments

If you’re considering larger commercial properties, CMBS loans might be the way to go. These loans are packaged into securities and sold to investors, offering flexibility and competitive terms.

Advantages:

  • Lower interest rates for qualified borrowers.

  • Non-recourse loans (you’re not personally liable if the property fails).

  • Great for large-scale investments.

Challenges:

  • More complex terms and conditions.

  • Limited prepayment flexibility.



4. Bridge Loans: A Temporary Solution

Need short-term financing to close a deal quickly? Bridge loans provide temporary funding until long-term financing can be secured.

Perfect For:

  • Investors needing immediate cash to secure a property.

  • Properties undergoing renovations before refinancing.

Key Features:

  • Higher interest rates (it’s short-term, after all).

  • Flexible approval process.

  • Quick turnaround time.

Hot Tip: Bridge loans are perfect for buying off-market commercial properties in Riverside, where timing is everything.



5. Private Lenders: Flexible but Costly

Private lenders are a popular alternative for those who may not qualify for traditional loans. These lenders offer more flexibility but often come with higher interest rates.

Pros:

  • Faster approval process.

  • Easier qualification criteria.

  • Customizable loan terms.

Cons:

  • Higher interest rates and fees.

  • Shorter repayment terms.



6. Owner Financing: Creative Negotiations

Some property owners offer financing directly to buyers, eliminating the need for a traditional lender. This can be a win-win for both parties, as it simplifies the process and offers more room for negotiation.

Benefits:

  • Lower upfront costs.

  • Flexible terms tailored to both parties.

  • Faster transaction timeline.

Insider Insight: This option is more common for smaller properties or motivated sellers. It’s worth asking about!



7. Equity Partnerships: Sharing the Load

For those who want to reduce risk, an equity partnership can be an excellent option. This involves partnering with another investor to pool resources and share ownership of the property.

Why It Works:

  • Splits the financial burden.

  • Access to larger or more valuable properties.

  • Shared expertise and connections.

Friendly Reminder: Make sure your partnership agreement is crystal clear to avoid conflicts down the line.



Financing doesn’t have to be intimidating. At Bobby Mendez Realty, we’re here to connect you with trusted lenders, simplify the paperwork, and guide you through the process. From traditional bank loans to creative financing options, we’ve helped countless clients secure funding for commercial buildings in Riverside, CA.

And don’t forget to explore Riverside’s thriving neighborhoods! Check out our blog, “Top Riverside Neighborhoods to Buy Commercial Buildings in 2025,” to learn more about where to invest.



Ready to explore your financing options? Contact Bobby Mendez Realty today and let’s get started on turning your commercial real estate goals into reality.



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