For commercial property, the deposit (or down payment) is usually larger than for residential real estate.
Here’s the typical range:
- Conventional commercial loans: Banks usually require 20%–30% of the property’s purchase price as a deposit.
- SBA 7(a) or SBA 504 loans (U.S.): These government-backed loans often let you put down as little as 10%, sometimes a bit more if the property is specialized or risky.
- Investor / rental properties: Lenders often ask for 25% or more, since these are considered higher risk than owner-occupied properties.
- Zero-down options: Rare, but in some cases (e.g., seller financing, partnerships, or if you secure additional collateral) you might not need much upfront.
👉 Example: If you’re buying a $1,000,000 commercial building:
- With a 25% deposit, you’d need $250,000 cash down.
- With an SBA loan (10%), you’d need only $100,000.
Simple table showing how much deposit you’d typically need to put down on a commercial property (using a $1,000,000 purchase price as an example):
| Loan Type | Typical Deposit % | Cash Deposit on $1,000,000 |
|---|---|---|
| Conventional Bank Loan | 20% – 30% | $200,000 – $300,000 |
| SBA 7(a) Loan (U.S.) | ~10% – 15% | $100,000 – $150,000 |
| SBA 504 Loan (U.S.) | ~10% (sometimes more) | $100,000+ |
| Investor / Rental Property | 25%+ | $250,000+ |
| Seller Financing / Partnerships | Varies (sometimes 0%) | Negotiated |
👉 The exact deposit depends on the lender, your credit profile, the type of property (office, retail, multifamily, industrial), and whether you’re occupying it or renting it out.