Financing Options for Buying Industrial Real Estate

Buying industrial real estate can be one of the best investments you make, whether you’re an investor or a business owner tired of paying rent. The challenge most buyers face is financing. Luckily, there are several ways to structure a deal that fit different budgets and goals.

Unlike a residential mortgage, financing an industrial property depends not just on your financials but also on the property’s income potential, tenant strength, and overall deal structure. Let’s look at the most common options.

Conventional Bank Loans for Industrial Real Estate

Conventional loans are the most straightforward route. Banks and credit unions typically require 20–30% down, solid credit, and clean financial statements. Terms often run 5–10 years with amortization over 20–25 years. If you’re well-qualified and want predictable payments, this is a reliable choice.

SBA 504 Loans: A Popular Option for Owner-Occupants

The SBA 504 program is perfect if your business will occupy at least 51% of the property. With as little as 10% down and fixed-rate financing for up to 25 years, this program makes buying industrial space more affordable. The loan is structured through both a bank and a Certified Development Company (CDC).

SBA 7(a) Loans for Flexibility

The SBA 7(a) loan offers more flexibility. It can cover not only real estate but also equipment, renovations, or working capital. Down payments range from 10–15%, and repayment terms can stretch up to 25 years. This option works well for smaller or mixed-use facilities.

Commercial Bridge Loans for Quick Closings

If a property needs upgrades, stabilization, or you need to close quickly, bridge loans fill the gap. They’re short-term (6–36 months) with higher interest rates, but they give you time to refinance into permanent financing once the property is ready.

Seller Financing as a Creative Option

In some cases, the seller may be willing to finance the property. This can be a win-win if traditional financing is tough to secure. The seller becomes the lender, with terms negotiated directly. Interest rates may be higher, but it cuts out the bank and can get a deal across the finish line.

Tips for Securing Industrial Property Financing

• Organize your financials: tax returns, business plan, and rent rolls

• Shop multiple lenders—different banks have different appetites for industrial deals

• Match financing to your goals: stability, speed, or flexibility

• Don’t rule out creative structures like seller financing or partnerships

  
  

The Bottom Line

Financing an industrial property doesn’t have to be overwhelming. From SBA programs and conventional loans to bridge financing and seller-backed options, there’s usually a path forward. The key is choosing the structure that aligns with your long-term strategy.

Ready to Explore Industrial Real Estate Financing?

If you’re looking to buy industrial property and want guidance on financing options, I can help you map out the best path. Whether you’re a small business owner or an investor, having the right strategy makes all the difference.

Reach out today at 215-778-8610 or email johnb@bricksbroker.com to discuss your goals and financing strategy.