A Guide to Obtaining a Commercial Mortgage

The terms and conditions of a commercial mortgage may vary depending on the lender. However, most commercial mortgages have a payback term of five years or less. These mortgages are typically used to finance the purchase of retail space, office buildings, warehouses and several other types of commercial real estate.

Commercial mortgages are also more expensive than residential mortgages due to the higher risk involved in lending to businesses. If you want to qualify for a commercial mortgage, you will need a down payment of 20% or more.

As a borrower, you must also have a good credit score and a strong business history. If you’re considering taking out a commercial mortgage, comparing offers from multiple lenders is essential to ensure you get the best deal possible.

In today’s blog post, let’s explore how to get a commercial mortgage in Toronto. Here’s what you need to know:

Table of contents:

  • Improve your business credit score
  • Explore the market for better loan options
  • Understand the types of property you can finance
  • Keep all your financial paperwork near at hand

Improve your business credit score

Before you even start exploring the market for a commercial mortgage in Toronto, you will have to know your business credit score. It is a three-digit number that is used by the lender to assess your creditworthiness (the loan amount that can be offered to you).

If you have a high credit score, it will give you access to the best loan terms and conditions as well as interest rates. So, it’s highly important that you ensure your business credit score is as high as possible before you start applying for loans. You can get your business credit score from a number of several different sources, including Dun & Bradstreet and Experian.

Explore the market for better loan options

Once you have a clear idea of what your business credit score is, you can start shopping for the best loan terms. You will have the upper hand to negotiate the contract as per your financial needs.

Many lenders offer commercial mortgages, so it is essential that you compare offers from numerous sources. Also, when you are comparing loan offers, you must pay close attention to the interest rate, loan term, and other fees and charges.

Understand the types of property you can finance

Most commercial mortgage lenders will only be willing to finance certain types of commercial properties in Toronto. For example, some lenders only offer a commercial mortgage for office buildings, while others might only finance retail space. So, when you are applying for a loan, you should know what type of property the lender will finance.

Keep all your financial paperwork near at hand

When you are finally ready to get a commercial mortgage, the first step is to ensure that your financial documents are in order. This will include

  • Tax returns
  • Filing for bankruptcy
  • Information that lenders will need to evaluate your business


The most important thing for you to remember is, when it comes to getting a commercial mortgage in Toronto, you will always have to be prepared. Toronto commercial mortgage lenders like to see suitable documentation and proof that your business is profitable and has been steadily growing over the years.

You should remember that the turnaround time for a commercial mortgage can be longer than for a residential loan. So, do your research and take all the necessary steps to make sure you get your funds as quickly as possible. If you need help securing a commercial mortgage in Toronto, contact ABC Mortgages. You won’t regret it.

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