Commercial real estate loan rates are not one number. What you actually pay depends on the property type, whether the building is owner-occupied or investment-oriented, how much you are putting down, and whether the deal is structured as conventional, SBA 504, SBA 7(a), bridge, or construction financing.
That is why two borrowers can both say they are "getting a CRE loan" and end up with completely different pricing. This guide lays out the current planning ranges and shows where conventional financing, SBA 504, and SBA 7(a) each make the most sense.
Current CRE Rate Snapshot
Public lender estimates compiled by NerdWallet and published in 2025 put average commercial real estate pricing in these ranges. Treat these as planning benchmarks, not live quotes. Market conditions and borrower profile still drive your final number.
| Loan type | Estimated range | Typical fit |
|---|---|---|
| Conventional commercial loan | 6% to 10% | Owner-occupied or investment property with stronger financials |
| SBA 504 | 5% to 7% | Owner-occupied real estate and heavy fixed assets |
| SBA 7(a) | Up to 12.5% | Owner-occupied deals that need more flexibility |
| Bridge loan | 7% to 14% | Speed, transition, repositioning, or interim financing |
| Construction loan | 8% to 13% | Ground-up construction or major renovation |
Why SBA 504 Is Often the Cheapest Long-Term CRE Option
If the property is going to be owner-occupied, 504 should be the first structure you look at. It typically delivers the lowest long-term rate, fixed pricing on the CDC portion, and a fully amortizing structure with no balloon payment. That combination alone can make a real difference to your monthly cash flow.
504 is not the fastest route, and it does not work for every property type. But for owner-occupied deals, it is often the most compelling long-term payment structure you will find.
Why SBA 7(a) Still Matters for Real Estate
SBA 7(a) is usually pricier than 504 for a straightforward owner-occupied purchase. But it is more flexible. If your deal involves working capital, tenant improvements, business acquisition components, or a structure that needs to cover more than just the building itself, 7(a) can be the better fit.
Put simply: 504 is the cleaner real estate tool. 7(a) is the more adaptable business-financing tool that happens to also support real estate.
What Conventional CRE Loans Do Better
Conventional CRE loans are often faster and simpler when the borrower and the property are strong enough to support them. They are also more flexible for investment properties where SBA occupancy rules would get in the way.
- Best fit: stronger sponsors, larger down payments, cleaner deals
- Tradeoff: more cash required upfront, and many structures include a balloon payment
- When they win: speed matters, the property does not fit SBA criteria, or you want fewer program restrictions
Approximate Monthly Payment Comparison
To show how rate and structure affect cash flow, here are simple payment examples on a borrowed amount of $1,000,000. These are amortized illustrations and do not include closing costs, fees, escrows, or down payment.
| Structure | Example rate | Term used | Approx. monthly payment |
|---|---|---|---|
| SBA 504-style example | 6.0% | 25 years | About $6,443 |
| Conventional example | 8.0% | 25 years | About $7,718 |
| SBA 7(a)-style example | 10.5% | 25 years | About $9,442 |
These are not real quotes. They are planning numbers. But they make the key point clearly: the structure you choose matters just as much as the rate itself.
What Moves Your Real Rate Up or Down
- Owner-occupied vs. investment: Owner-occupied deals tend to get the best SBA treatment.
- Down payment: More equity in the deal generally means better pricing.
- Property type: Office, retail, industrial, medical, mixed-use, and special-use assets all price differently.
- Debt service coverage: A stronger DSCR means the lender sees lower risk.
- Experience and liquidity: Sponsors who bring reserves and relevant experience are easier to finance.
When to Compare 504, 7(a), and Conventional Side by Side
You should run all three comparisons when:
- The property will be owner-occupied
- You want to minimize the monthly payment
- You are trying to keep more cash in the business after closing
- You may need capital beyond the building itself
If your project is specifically owner-occupied, the most useful next read is owner-occupied commercial real estate loans. If you are weighing SBA structures against each other, start with SBA 7(a) vs. 504.
How to Improve Your Quote Before You Go to Market
- Come in with clean personal and business financials.
- Show reserves after closing, not just enough cash to get in the door.
- Use a realistic purchase price and realistic appraisal expectations.
- Match the program to the property instead of trying to force the property into the wrong program.
- Work with lenders who actually have appetite for your property type and market.
In commercial real estate, a lower rate on the wrong structure can still be a worse deal. The strongest outcomes come from matching the property, the occupancy, the leverage, and the timing to the right program, not just chasing the smallest number on the term sheet.
If you are actively shopping a property, the next best step is the commercial real estate loans page or the broader CRE financing guide.