What percentage amount do banks generally require as down payment on commercial property?
Answer Dear Lara, Probably 80% of all commercial purchases utilize a down payment of 25-30%, simply because lenders consider the majority of commercial transactions to be quite risky and want to reduce their exposure to risk. One of the major requirements in approving a borrower for a loan is that the property will not show negative cash flow after all operational and mortgage expenses have been paid. But if the property has a long term tenant and seems to be almost risk free, you may be able to purchase the property with a loan of 80 and even 90% of the price, but only if the numbers make sense. As you know, you can obtain a 90% SBA (Small Business Administration) loan if you intend to occupy more than 50% of the property.
