Small-balance commercial loans under $2 million fill the gap banks ignore — the 8-unit in Tampa, strip in Phoenix, flex in Dallas that never hits a CMBS desk but still needs professional debt.
Deals under $2 million are still commercial. Banks often skip them. Jaken Finance Group prices qualified investor files at bridge 8.99%–13.5% IO and DSCR 5.75%–10.5% on that size. Program map: commercial real estate financing. Scenario: commercial loan request. (833) 264-7776.
Why banks pass on sub-$2M
- CMBS minimum securitization sizes
- Relationship banking focused on owner-occupied
- Committee cost exceeds profit on $800K loans
- Sponsors without W-2 income fail DTI boxes
Jaken Finance Group prices property cash flow and exit on qualified investor files.
Product map under $2M
| Asset | Typical size | Product |
|---|---|---|
| 5–20 unit MF | $600K–$1.8M | Bridge → DSCR |
| Mixed-use | $400K–$1.5M | Bridge or DSCR |
| Strip retail | $500K–$2M | DSCR on NOI |
| Small industrial | $700K–$2M | Bridge / DSCR |
| Self-storage / MHP | $800K–$2M | Asset-class bridge |
Commercial property loans by asset class
Worked example — Charlotte 12-unit
- Purchase $1,125,000
- In-place NOI $86,000
- Bridge 70% LTC at 10.5% IO — $787,500
- CapEx $140,000 unit turns
- DSCR refi month 13 at 72% LTV, 7.5%, DSCR 1.21
Small balance does not mean small diligence — rent roll and T-12 still required.
Leverage expectations
Stabilized: often 65%–75% LTV on 5+. Value-add bridge: 65%–75% LTC depending on scope and exit.
Compare multifamily DSCR vs commercial loan before assuming bank commercial is the only permanent path.
Commercial loan request · (833) 264-7776
Why small-balance CRE is not mini-CMBS
FDIC’s commercial real estate credit resources describe how banks watch CRE concentrations. That is why a $1.4 million 8-unit often sits in a “too small for the CRE desk, too commercial for the consumer desk” gap. Private DSCR and bridge fill that gap.
SBA 504 can work when the sponsor will occupy 51%+. Passive investors do not get that box. See can real estate investors use SBA loans.
Small-balance files still need a rent roll, not a residential 1007 pretending to be NOI. Ticket size under $2 million does not mean consumer underwriting. It means faster private credit when the exit is named.
Jaken Finance Group prices qualified files at DSCR 5.75%–10.5% and bridge 8.99%–13.5% IO. Submit at commercial loan request. Asset matrix: commercial property loans by asset class. (833) 264-7776.
Why supervised banks walk away from sub-$2M CRE
Bank CRE desks live under concentration and policy reviews. The FDIC publishes commercial real estate resources for bankers that explain how examiners look at CRE books. A $750,000 mixed-use loan can cost almost as much committee time as a $6 million deal and earn less. Relationship banks also prefer owner-occupied operating companies with deposits.
That is not a moral failure. It is a cost curve. Investor sponsors without W-2 income fail DTI boxes on top of the size problem. Collateral-first private credit is how those addresses still get debt.
SBA 504 is usually the wrong investor tool
SBA 504 loans finance eligible owner-occupied commercial real estate through a CDC and a bank. Job creation and occupancy tests apply. A landlord who will not occupy 51% of the building is not a 504 applicant. Do not force a 12-unit rental into a 504 narrative.
If you occupy the building for your operating company, call an SBA lender. If tenants occupy it, stay on DSCR loans or bridge loans for real estate investors. Occupancy is the fork. Size is not.
Appraisal cost as a share of a $700K loan
A commercial income appraisal on a small asset can feel expensive as a percent of loan amount. It is still the right report on 5+ units. Ordering a cheap residential form to “save time” adds 7–10 days and a second fee. Multifamily 5–10 unit DSCR loans exist because this size is common — and because the income test is commercial.
Points matter more on small balances too. Two points on $700,000 is $14,000. Model that next to the rate. Losing a contract because you waited for a bank committee is often more expensive than the points.
Unanchored retail and weak tenant credit under $2M
A four-bay strip with local tenants is not a grocery-anchored center. Expect more equity — often 30%–35% down — when leases are short and credit is thin. In-place NOI still has to support DSCR at 5.75%–10.5% if you want permanent debt. Vacant bays belong on bridge at 8.99%–13.5% IO with a lease-up plan.
Commercial property loans by asset class splits retail, industrial, storage, and outdoor hospitality. Small balance does not erase those differences.
First commercial multifamily vs your fifth fourplex
Sponsors who have only closed 1–4 unit DSCR sometimes treat an 8-unit as “the same, plus doors.” It is not. You need T-12, a real rent roll, and often a commercial appraisal. Experience helps leverage. It does not skip exhibits. First-time 5+ buyers should read first commercial multifamily loan before they write a hard earnest-money check.
Worked small-balance stack — Greensboro 11-unit
Purchase $1,040,000. In-place NOI $79,000. Two units down for turns. Bridge 69% LTC at 10.625% IO funded $717,600. CapEx $95,000. DSCR takeout month 12 at 73% LTV, 7.49%, DSCR 1.19 on stabilized NOI. The bank never quoted. The file was “too small” and the sponsor was self-employed.
Cross-collateral and two small assets
Two $600,000 buildings can be easier to leverage together than one thin $600,000 standalone when the sponsor is experienced and title is clean. That is a structured ask. Put both addresses on commercial loan request. Do not hide the second property in a footnote.
Insurance and taxes that punch above their weight
On a $900,000 asset, a wildfire or coastal wind line can move DSCR by more than a 25-basis-point rate change. Quote insurance on the exact address before you lock leverage in your offer. Property-tax reassessments after purchase do the same. Small balance is not “small risk.”
How to keep the file boutique without making it sloppy
Small-balance underwriting still wants full statement pages, entity docs, and a written exit. “It’s only $800K” is not a waiver. Loan process is the same sequence at a smaller dollar amount. Investment property loans for LLC still applies to vesting.
Call (833) 264-7776 when a bank said the hold is below their minimum. Have the address, NOI, and whether you need speed or a 30-year hold. Second Look is appropriate after a formal decline. A “we don’t do that size” email is enough reason to apply here.
What “under $2 million” still excludes
Owner-occupied SBA, agency multifamily, and CMBS conduits are different products even when the loan amount is small. Ground-up with no income is a construction conversation. Note purchases are legal and collateral reviews first. Jaken Finance Group investor programs are non-owner-occupied bridge and DSCR on real property you intend to rent or reposition.
If the asset will stabilize above $2 million after value-add, say so. The bridge can still start small-balance sized. The takeout may not. Put the exit value in the memo so nobody sizes the permanent sheet on today’s as-is number alone.
Mixed-use under $2M: two income stories, one loan amount
A retail-over-four-residential building at $1.4 million is small-balance by dollars and commercial by underwriting. Split the rent roll. A short remaining term on the shop can kill DSCR even when the apartments are full. Do not send one “total rent” number and hope the desk allocates it.
If the commercial bay is dark, that is a bridge story with a lease-up budget. If both stories are occupied on leases you can show, DSCR at 5.75%–10.5% may work. Commercial real estate financing is the product map. The sections below are the size map.
Outdoor hospitality and storage at boutique dollars
A 40-pad MHP or a 200-unit self-storage can still sit under $2 million in many metros. Those files need pad or unit-count charts, utility billing, and occupancy history — not an apartment T-12 pasted into a new filename. Commercial property loans by asset class lists the extras. Small balance does not waive them.
RV parks with seasonal occupancy need a longer look at trailing income. Do not annualize two peak months.
Seller financing as a gap, not a substitute for underwriting
A seller note can fill equity on a sub-$2M purchase. The senior lender still wants to know payment, lien position, and whether the seller must subordinate. Hidden seller paper found at title is a delay. Disclose it on commercial loan request.
Worked miss — Dallas flex at $1.65M
A sponsor sent a flex building as “industrial DSCR” with one tenant on a six-month remaining term and no renewal. The desk would not treat it as stabilized. They recast as bridge at 66% LTC, 11.0% IO, with a 12-month lease-up exit. The dollar amount was never the issue. The WALT was.
How community-bank “maybe” wastes a 21-day inspection
Some banks say they might do $1.2 million if you move deposits and wait for committee. If the seller’s inspection ends in 10 days, that maybe is a no. Run the investor clock in parallel. You can always decline the private sheet if the bank actually commits. You cannot recover a lost contract.
Investment property loans for LLC still applies at this size. Form the entity while you wait on the first review, not after the bank’s third postponement.
Rate bands do not shrink with loan size
Qualified small-balance files still price in the published ranges — bridge 8.99%–13.5% IO, DSCR 5.75%–10.5%. You do not get a “tiny deal discount” and you should not be charged a “nuisance premium” as a substitute for leverage. Leverage, asset, and exit set the coupon. Size sets whether a CMBS desk will look at you at all. Most will not. That is the point of this page.
Call (833) 264-7776 with the address and in-place NOI if a banker already told you the hold is below their minimum. Have the exit product named — DSCR loans or a 12-month bridge — so the first review is a real scenario, not a size complaint. Bring the T-12 if you have one.
Worked file — $1.35M 9-unit, not a bank CRE ticket
Purchase $1,350,000. In-place NOI $118,000. Bank CRE desk passed: “below relationship minimum.” Private DSCR at 72% LTV ($972,000) and 7.375% produced PITIA that still cleared 1.21 coverage. Two points and a 14-day close beat a 60-day “maybe.”
That is the small-balance job: ticket size under $2 million, commercial income approach, investor occupancy. See multifamily DSCR vs commercial loan before you rewrite the offering as a consumer fourplex.
Rates, terms and conditions offered only to qualified borrowers and are subject to change at any time without notice. Closing times are in business days and commence upon receipt of appraisal payment and satisfaction of borrower conditions. All loans are subject to full underwriting for loan approvals. Jaken Finance Group only finances non-owner occupied investment properties.