Commercial Financing in Canada: What’s the Minimum Down Payment for a Property?

When you hear the term commercial financing in Canada, it might sound a bit complex. But really, it means borrowing money to buy or build a business property. This is different from buying a house. With commercial financing, you are usually investing in a building that makes money, like a store, office, or rental property.

In this article, we’ll go over what commercial financing means, how much money you might need to put down, and how it compares to other types of loans. We’ll also answer some of the most common questions people ask when looking into commercial loans.

What Is the Meaning of Commercial Financing?

Commercial financing is when you borrow money to buy or fix up property used for business. These can be office buildings, warehouses, stores, or large rental buildings. This type of financing is used by investors, business owners, or anyone who wants to make income from the property.

The loan amount depends on how much the property is worth, how much income it can make, and how strong your business finances are. This is not the same as a home loan, where your personal income and credit score are more important.

What Is Commercial Finance With an Example?

Let’s say you want to buy a small retail building in Vancouver for $1.2 million. You go to a mortgage broker in Vancouver BC who works with lenders offering commercial financing. They approve a loan for 70% of the price. That’s $840,000. You will need to pay the rest as a down payment, which is $360,000.

This is an example of commercial financing. You are using a loan to buy a business property. The property should make enough money to cover the loan payments and give you some income. This is very different from a home mortgage, where the loan is based mostly on your personal finances.

What Is the Minimum Down Payment for a Commercial Property in Canada?

The minimum down payment for a commercial property in Canada is usually 25% to 35%. This is higher than the 5% or 10% needed for some residential mortgage options. Why? Because business properties are seen as more risky by lenders. If your property does not earn money, you may struggle to pay the loan.

Here are some examples:

• If you are buying a property to use for your own business, you may be able to get away with 20% down.

• If the property is just for investment, many lenders will ask for 30% or more.

• If it is a special-use building, like a hotel or gas station, you may need to put down 35% or higher.

The lender will also look at your credit, how much money the property can make, and how strong your business is.

Commercial Financing vs. Residential Financing

Let’s look at the key differences between commercial financing and home loans.

Feature	Residential Loan	Commercial Loan
Type of property	Home or small rental (1–4 units)	Business buildings or large rentals
Down payment	5% to 20%	25% to 35%
Loan term	15–30 years	5–20 years
Based on	Personal income and credit	Property income and business strength
Interest rate	Usually lower	Often higher

Residential financing is more about your credit and income. Commercial financing is based on whether the building will make enough money.

What’s the Difference Between a Business Loan and a Commercial Loan?

A business loan is money you borrow for business needs, like buying equipment or covering payroll. These loans are usually unsecured, and they do not involve real estate.

A commercial loan is used to buy or refinance property. The loan is secured by the property itself. You can use this kind of loan to buy a building for your business, rent out units, or even develop a new space.

In simple terms: if the money is for the business, it's a business loan. If the money is for the property, it's commercial financing.

Why Work With a Mortgage Broker in Vancouver BC?

Getting a commercial mortgage is not simple. That’s why working with a good mortgage broker in Vancouver BC can help. A broker knows which lenders to talk to, what paperwork you’ll need, and how to get the best rate.

Here’s what a broker can do:

• Help you understand the loan process

• Find lenders offering the right kind of loan for your situation

• Handle the paperwork and speed up approval

• Explain your options clearly and simply

At Syndicate Lending Corporation, we help both new and experienced buyers get access to the right loans. Whether you are buying a new building or refinancing an old one, we are here to help.

You can check out Mortgage Professionals Canada for trusted, high-authority resources about licensed brokers and industry education.

Documents You May Need for Commercial Financing

Before a lender can approve your loan, they will need to look at your paperwork. Here are some documents that may be required:

• Your personal credit report

• Proof of your business income

• A list of your assets and debts

• An appraisal of the property

• Rent roll (if the property has tenants)

• Tax returns from the past 2 or 3 years

• Your business plan or income projections

Each lender is different, so be ready to provide more if needed.

How Syndicate Lending Corporation Can Help

We are based in Vancouver BC and help clients across British Columbia. Whether you're looking for a residential mortgage, home mortgage, or commercial financing, our goal is to make the process smooth and stress-free.

We also work with syndicate lending, where many lenders come together to provide large loans. This is helpful when one lender cannot fund the full amount alone. 

Commercial financing may seem tricky at first, but with the right help, it becomes much easier. Just remember:

• You’ll usually need a down payment of 25% or more

• Lenders focus on property income, not just your credit

• A good mortgage broker can save you time and money

At Syndicate Lending, we specialize in smart, flexible mortgage solutions — no unnecessary refinancing, no confusion.

🔍 Explore more insights on our blog to learn how second mortgages and other lending tools can work for you, or visit our website to learn all the services we offer.

 🤝 Get in touch with our team if you have questions or want tailored guidance.

 📝 Ready to get started? Fill out our quick application form — and we’ll help you access the funds you need without touching your first mortgage.