How Lending Standards Have Been Tightened for Commercial Mortgage Lenders?

Due to the slowing economy and downturn in real property values, and the current "credit crunch", even highly flexible private "hard money" commercial lenders for mortgages have tightened lending standards and changed their criteria.

You can also search for online services of hard money commercial loans via

Commercial Real Estate Lending - Overview, Importance, Types

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The down-payment requirement is the most significant change and most difficult for borrowers. Private and conventional lenders have stopped issuing 100% financing. The mandate to cash-in-the-game is almost universal.

90% hard equity is the minimum amount that most people would consider reasonable. This means there has to be cash down or cash contributed previously. They must verify that the borrower has made a financial commitment to the development or building before they approve a mortgage loan. 

Lenders will approve mezzanine or seller-carried 2nds of large amounts, but the total amount must not exceed 90% of the purchase price.  


Today, funding sources worry about the safety and security of their capital. They prefer to lend to licensed, experienced professionals. This is not the right time to approach a lender to finance an experiment. 

It will be a benefit to have some real-world, on-the job experience in the automotive industry if you are buying a gas station. 


Private loans are short-term loans that last for 6 to 36 months, but rarely longer. Hard money lenders don't lend to own property and aren't lend-to-own. 

They will want to know exactly how much you plan to repay them before they sign a contract. Refinance and selling are the two most popular exit strategies.