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For Stabilized Commercial Buildings

Interest-Only Commercial Loans.

Interest-only payments for up to the full term on stabilized commercial property, with non-recourse available on loans of $2M and up. Because the loan qualifies on the smaller interest-only payment, the same building can often support a larger loan.

Get a QuoteSee typical terms
Program Snapshot
$2M+
Loan size
Full term
Interest only
80%
Maximum LTV on select loans
10 yr
Longest fixed term
Non-recourse available on loans of $2M and up
Interest only for up to the full term
Office, retail, industrial, self storage, mixed use, hotels, and mobile home communities
Program Overview

A bigger loan, and non-recourse available.

Most commercial loans come with two things owners of larger buildings would rather avoid: a payment that pays down principal on a 20 or 25 year schedule, and a personal guaranty that puts everything you own behind one building. On a stabilized property with strong income, neither is always necessary.

Interest-only commercial loans run interest only for part or all of a 2 to 10 year fixed term. Because the loan is measured against the smaller interest-only payment, the same income supports a larger loan, which often means more cash out on a refinance. And non-recourse is available on loans of $2 million and up, so the building secures the loan, not your personal balance sheet.

These loans fit stabilized buildings with steady income. A building that's still leasing up usually starts with a bridge loan and moves here once it's stabilized.

What you get
Interest-only commercialTypical bank loan
Recourse
Non-recourse available on loans of $2M and up
Full personal guaranty
Payments
Interest only for up to the full term
Principal and interest on 20 to 25 years
Fixed term
2 to 10 years
Usually 5 years
Loan size
$2M and up
Often capped by the bank's limits
Typical terms

What you can typically borrow

These are typical ranges, not a quote. Your terms depend on the property, the income, the leverage, and the structure you choose.

Loan amount
$2,000,000 and up
Loan purpose
Purchase, refinance, and cash outStabilized properties
Maximum LTV
75%Up to 80% on select loans
Fixed term
2 to 10 years5, 7, and 10 year fixed most common
Interest only
Up to the full term25 or 30 year amortization also available
Minimum DSCR
Typically 1.20x and upMeasured on the interest-only payment
Rate
From about 7%Fixed rates set over Treasuries
Recourse
Non-recourse available on loans of $2M and upStandard carve-outs apply
Earnout
Available on larger loansPart of the loan held back and released once the building hits an agreed occupancy or income target
Borrower
Single purpose entityAn LLC or LP formed to own the property
Property types
Office, retail, industrial, self storage, mixed usePlus hotels and mobile home communities
Escrows
Taxes and insurance escrowedCollected with the monthly payment
Prepayment
Varies with the termStep-down on most loans, yield maintenance on some longer terms
Available in
35 statesAL, AK, AR, CO, CT, DE, FL, GA, HI, IL, IN, IA, KS, KY, LA, ME, MD, MA, MS, MO, MT, NE, NH, NM, OH, OK, PA, SC, TN, TX, VA, WA, WV, WI, WY, DC. Very rural areas within these states may be restricted.
Note: These are typical terms. Yours depend on the property, the tenants, the leverage, and the term you choose. Apartment buildings use our Interest-Only Apartment Loans program.
Own a stabilized commercial building worth $3M or more?
Send the numbers and we'll come back with interest-only and amortizing terms side by side.
Get a Quote
Where it fits

Buildings where it fits

Multi-tenant office campus with glass-front towers behind a landscaped lawn
Multi-tenant office

Stabilized office and medical office with a diversified rent roll.

Anchored retail center with storefronts facing a large parking lot
Retail centers

Anchored and unanchored centers with steady occupancy and long leases.

Distribution center with trailers backed into a long row of loading docks
Industrial and warehouse

Distribution, flex, light industrial, and manufacturing buildings with established tenants.

Climate-controlled self storage building with drive-up unit doors
Self storage

Stabilized facilities with consistent occupancy and rate history.

Five-story select-service hotel with a covered entry and parking lot
Hotels

Stabilized hotels with a strong operating history.

Paved entry road into a fenced, tree-lined mobile home community
Mobile home communities

Established communities with steady lot rent.

Who this is for

Built for owners of larger buildings

Get a Quote
1

You want cash out

Interest only supports a larger loan on the same income, so a refinance can return more equity.

2

You don't want to sign a personal guaranty

Non-recourse keeps the loan on the building, except standard carve-outs.

3

You care most about monthly cash flow

An interest-only payment keeps more of the rent in your account.

4

You plan to sell or refinance within 10 years

Principal paydown matters less than proceeds and cash flow on a planned hold.

Interest-Only Commercial Questions

Frequently asked

What is an interest-only commercial loan?+
A commercial real estate loan where the payment covers only interest for part or all of the term. Because the payment is smaller, the same income can support a larger loan than a fully amortizing one.
What does non-recourse mean?+
The loan is secured by the property, not by you personally. If the loan goes bad, the lender's remedy is the building, not your other assets. Non-recourse loans still have standard carve-outs.
What are standard carve-outs?+
Specific acts that make the borrower personally liable even on a non-recourse loan, such as fraud, misusing rents or insurance proceeds, filing for bankruptcy to stall a foreclosure, or transferring the property without approval. They're often called "bad boy" carve-outs. Owners who run the building honestly don't trigger them.
How much more can I borrow with interest only?+
It depends on the rate and the income. At a 7% rate, an interest-only payment typically supports about 14% more loan than a 30 year amortizing payment on the same income, up to the maximum LTV.
What loan size works best?+
$3 million and up gets the strongest terms. Loans from $2 million are considered. Smaller commercial loans usually fit our Commercial DSCR program.
Can I take cash out?+
Yes. Cash out is one of the most common reasons owners choose interest only, since the larger loan returns more equity on a refinance.
Do you need my personal tax returns?+
Not on many loans. The property's operating statements and rent roll come first. Larger loans still review your personal financial statement and liquidity.
Do you finance hotels and mobile home communities?+
Yes, when they're stabilized with a strong operating history.
Is there a prepayment penalty?+
It varies with the term. Most loans carry a step-down that declines each year, and some longer fixed terms carry yield maintenance. You'll see the exact schedule before you commit.
Interest only or amortizing: which is better?+
Interest only fits owners who want the largest loan and the lowest payment. A 25 or 30 year amortization fits owners who want to pay the loan down. You can see both on the same building before you decide.
My building isn't stabilized yet. What are my options?+
A bridge loan can carry the building through lease-up, then refinance into an interest-only commercial loan once it's stabilized.
Can part of the loan be released later, once the building hits a target?+
On larger loans, sometimes. Part of the loan can be held back at closing and released once the building reaches an agreed occupancy or income level, often called an earnout. It's reviewed case by case on stabilized buildings with a clear path to the target.
Where does Capituro offer interest-only commercial loans?+
In 35 states: Alabama, Alaska, Arkansas, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Mississippi, Missouri, Montana, Nebraska, New Hampshire, New Mexico, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, Washington, West Virginia, Wisconsin, and Wyoming, plus Washington, DC. Very rural areas within these states may be restricted. Send the address and we'll confirm whether your property fits.
Get Started

Want more cash out of your building? Let's look at the loan.

Send the address and the numbers. We'll come back with interest-only and amortizing terms side by side.

Step 1 of 5

What are you looking to do?

Other programs

Interest-only

Interest-Only Apartment Loans

Interest only for up to the full term on apartment buildings.

Commercial

Commercial DSCR

30 year fixed on commercial property.

Net lease

NNN and Net Lease Loans

No prepayment penalty on properties leased to national brands.