Commercial Mortgages · BC & Alberta · Institutional to private capital
Commercial files get structured. They do not get shopped.
Residential lending underwrites you. Commercial lending underwrites the asset, its income and the story behind both. Different lenders, a longer process, and a set of documents most borrowers have never been asked for.
- Direct broker communication — you’re never chasing updates
- Self-employed, newcomers, bruised credit, commercial and private
How commercial differs
The property has to carry itself.
On a residential file the lender is mostly asking whether you can service the debt from your income. On a commercial file the first question is whether the property services the debt from its own income, with your covenant behind it rather than in front of it.
That single shift changes everything downstream. Net operating income, the quality and length of the leases, tenant covenant, vacancy risk and how the space would re-let all become central. A building with strong income and weak sponsorship is often more financeable than the reverse.
The other difference is that commercial lending is negotiated rather than posted. There is no rate sheet to compare. Terms come from a conversation between the lender and the file, which is why how the deal is presented genuinely affects what comes back.
- Net operating income and how the lender adjusts your figures
- Lease structure: terms, expiries, escalations, tenant covenant
- Asset class and location, which drive both appetite and pricing
- Sponsor experience and net worth, and the guarantee structure
- Environmental condition, which can stop a file outright
- The exit: sale, refinance, lease-up or a move to institutional debt
General information for British Columbia and Alberta. Not an approval, a rate quote or advice on your specific file.
- Direct broker communication — you’re never chasing updates
- Self-employed, newcomers, bruised credit, commercial and private
Asset classes
Each type underwrites on its own logic.
What follows is how lenders tend to look at each, and what we prepare before the file goes anywhere.
Class 01
Multi-family, five units and up
Underwritten on rental income, expenses and the market’s view of the asset. Generally the deepest lender pool in commercial, with insured programs available for qualifying residential rental properties.
Class 02
Owner-occupied commercial
Buying the building your business operates from. These blend commercial security with business financials and often qualify differently from a pure investment purchase, since the occupier and the borrower are the same party.
Class 03
Retail and office
Lease quality carries most of the weight. Term remaining, tenant covenant, renewal history and how readily the space would re-let matter more than headline rent.
Class 04
Industrial
Location, ceiling height, loading, power and zoning drive both value and lender appetite. Environmental history deserves attention early rather than late.
Class 05
Mixed-use
Residential over commercial is common and is underwritten on the blend. The ratio between the two components affects which lenders will look at it and on what basis.
Class 06
Land and development
Acquisition, servicing and vertical construction each carry different risk and are financed differently. Approvals, budget and the exit are the case; the land itself is only the security.
Requirements vary by lender, property, project, borrower and financing structure. Nothing here is a commitment to lend or a statement of any lender's current criteria.
Where the money comes from
Institutional or private is a trade, not a ranking.
Most commercial files could go either way, and the right answer depends on what the deal needs most: the lowest cost, or speed and flexibility. Neither is better in the abstract.
Institutional capital
Lowest cost of funds where the file fits the box
Extensive documentation: financials, leases, appraisals, environmental
Committee process and full due diligence, so longer to a decision
Best suited to stabilised assets with clean income and clean sponsorship
Alternative and private capital
Higher cost, and that cost should be justified by what it buys you
Leaner documentation, with the security and the story carrying more weight
Faster where speed genuinely changes the outcome
Suited to transitional assets, lease-up, repositioning and time-bound opportunities
Planned from day one around a defined exit
Private and alternative capital carries materially higher borrowing costs. General information for British Columbia and Alberta. Not an approval, a rate quote or advice on your specific file.
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Related
Where people usually go next.
Investment Property Mortgages
Residential rentals of four units or fewer are financed on residential rules. Different pool of lenders entirely.
Read more →
Construction Financing
Commercial construction and development, including land and servicing.
Read more →
Private Mortgages
Where speed, structure or a transitional asset makes private capital the sensible route.
Read more →
Commercial questions
What commercial borrowers actually ask.
General information for British Columbia and Alberta. Terms on commercial financing are negotiated per deal; nothing here states any lender’s criteria.
How is a commercial mortgage different from a residential one?
Residential lending underwrites you. Commercial lending underwrites the asset: net operating income, debt service coverage, lease structure and the strength of the tenants, with your covenant supporting rather than driving the decision. The documentation is heavier, the process is longer, and the terms are negotiated rather than posted.
How much down payment do I need?
It varies with the asset, its income, the lender and the structure of the deal. There is no single figure, and anyone quoting one without seeing the property has not looked at it. Send the details and you will get a realistic answer rather than a generic one.
At what point does a property become commercial?
The common dividing line in Canada is five units. Four units and under is generally financed on residential rules with a residential lender pool; five and up moves to commercial underwriting. Mixed-use and unusual configurations sit in between and depend on the lender.
What documents will I need?
Expect the property’s financial statements or a rent roll, the leases, personal and corporate financials, a current appraisal, and often an environmental report. On a purchase, the offer and any due diligence you have completed. The more complete this package is at the outset, the faster the file moves and the better the terms tend to be.
How long does a commercial file take?
Longer than residential, and it depends heavily on the lender and the asset. Institutional files carry a committee process and full due diligence. Private and alternative capital can move considerably faster at a higher cost. If your closing date is fixed, say so at the start, because it changes which lenders are realistic.
Can you finance a property my own business will occupy?
Yes, and owner-occupied files are often treated more favourably than a pure investment purchase, since the tenant and the borrower are the same party. The business financials become part of the underwriting alongside the property.
Do you handle commercial construction?
Yes, including land acquisition, servicing and vertical construction. Those are structured differently from a stabilised asset and are covered in more detail on the construction financing page.
