Here’s what to Do When the Bank Says No to Your Commercial Real Estate Loan.
You found a great property. You ran the numbers (more than once).
You even had some skin in the game.
But the bank?
They took weeks to respond—and still came back with a “no” or a “maybe next time.”
Welcome to commercial real estate loans in real life.
Banks want clean credit, perfect documents, and properties that practically run themselves. If you—or your deal—don’t fit the box, they won’t bend.
But that doesn’t mean your deal is dead. It just means you need a lender who understands investors—not just algorithms and approval committees.
📉 1: Why Banks Say No (Even to Good Deals)
Banks don’t just lend on real estate. They lend on risk profiles.
Here are some of the top reasons commercial real estate investors get denied:
– The property needs work (not stabilized)
– Borrower doesn’t show strong W2 income
– Too many moving parts: JV, new entity, self-employed
– DSCR is low or rent roll is inconsistent
– You’re moving too fast for their process
Banks love safe, simple, and slow.
But most real estate deals aren’t safe, simple, or slow.
🔄 2: What to Do Instead
Step 1: Figure out what made your deal “unbankable.”
Was it the asset? The timeline? The borrower profile? Knowing this helps you pivot to the right type of funding.
Step 2: Consider private and alternative lending options.
Private lenders, debt funds, and bridge lenders are built for the kind of deals banks avoid.
These lenders care more about:
– The property’s value add (what can be improved to increase Net Operating Income)
– The exit strategy
– The equity and experience behind the deal
Step 3: Be ready to move faster.
Non-bank lenders can close in weeks—not months. But they expect you to know your numbers and move with confidence.
💳 3: Common Options When the Bank Says No
Bridge Loan – Fast close, value-add, or urgent refi – Short-term and flexible—based on asset value-add potential
DSCR Loan – Rental properties with strong income – No tax returns needed—based on cash flow
Raising Private Capital – Connecting with high net worth individuals (506c accredited investors). These individuals have a net worth of $1 million (this does not include their primary residence/home they live in). You earn $200,000 or more ($300,000 or more combined with your spouse) and have done so for the past 2 years and expected to achieve the same this year. Or you hold an active professional license or certification (like Series 7, Series 65, or Series 82). Essentially, this designation assumes you have understanding of the level of risk you will be assuming in an investment of this size.
SBA 7(a) – Owner-occupied loan, where your business occupies 51% or more of the building. And you also own the property in which your building is housed.
✅ 4: What to Do Right Now
If you are mid-deal—or just got denied—don’t start over. Start smarter.
You don’t need a perfect profile. You need a fundable plan with a value-add property.
👉 Understand your gap
👉 Fix the weak points
👉 Match the right lender to the right deal
Can’t get funded by a bank?
Find out why it likely wasn’t funded and if your deal still has a strong chance to be funded with an alternative lender.
🎯 Take our 5-Minute Fundability Quiz to find out.