A loan against commercial property mortgages a shop, office, showroom, warehouse or commercial building you already own and converts its value into large-ticket, long-tenure capital — for business expansion, working capital, debt consolidation or any legitimate need. Because commercial assets typically carry higher values than residential ones, business owners often unlock bigger sanctions here than anywhere else in secured lending.
But "commercial property loan" is really a family of twelve distinct products — mortgage of an existing asset, purchase funding, construction finance, refinance, plot loans, lease rental discounting, top-ups and balance transfers — each with its own LTV grid, pricing logic and lender appetite. Applying for the wrong variant at the wrong lender is the single most common reason commercial files stall.
This hub explains each type and links to a dedicated deep-dive. CreditCares has structured commercial property finance from ₹1 Crore to ₹100 Crore since 2012, and places every file across the specific banks and NBFCs whose credit policy matches the deal.
The 12 types of commercial property loans — explained
1. Mortgage an Existing Commercial Property
This page — pledge a shop, office or warehouse you own for expansion, working capital or consolidation while retaining full use.
Explore →2. Commercial Property Purchase Loan
Fund buying a new or resale office, shop, showroom or commercial complex — up to 70% of value.
Explore →3. Commercial Construction Loan
Stage-wise disbursed finance to build offices, malls, hotels, warehouses or factories.
Explore →4. Commercial Property Refinance
Move your existing loan to a cheaper lender and release extra funds via top-up.
Explore →5. Commercial Plot Loan
Purchase commercial land for future development — specialist lenders, conservative LTV.
Explore →6. Office Space Loan
Buy or refinance office premises — for professionals, startups, MSMEs and corporates.
Explore →7. Retail Shop & Showroom Loan
Purchase retail units in markets, high streets and malls — retailers, franchisees, traders.
Explore →8. Warehouse & Godown Loan
Buy, build or refinance warehouses, cold storage and logistics facilities.
Explore →9. Industrial Property Loan
Purchase or mortgage factories, sheds and manufacturing units.
Explore →10. Lease Rental Discounting (LRD)
Borrow against future rent from a leased-out commercial asset — eligibility driven by rental cash flow.
Explore →11. Commercial Property Top-Up Loan
Additional funds over your existing commercial property loan, at near-base rates.
Explore →12. Commercial Balance Transfer
Shift to a lender with lower rates, longer tenure or better service — and cut EMI immediately.
Explore →Mortgaging an existing commercial property — how it works
The core product of this family: the lender registers a mortgage over your self-owned shop, office, showroom, warehouse or commercial building and extends 55–70% of its technical valuation as a term loan. You retain possession and continue operating from the premises; only the title deeds sit with the lender until closure. Funds carry broad end-use flexibility — business expansion, working capital, machinery, debt consolidation — and when deployed in the business, the entire interest is deductible under Section 37(1) with no cap.
Commercial valuations reward documentation. Lenders price off the lower of market and technical value, apply use-permission and occupancy checks, and treat rental-yielding assets more generously than vacant ones. A leased asset can often be structured as lease rental discounting instead, where eligibility is computed from the rent rather than your business income — frequently producing a larger sanction.
Why business owners favour commercial LAP
Bigger sanctions
Commercial assets in prime markets carry high values — a single Park Street office or Burrabazar shop can support a multi-crore facility.
Full end-use flexibility
Expansion, working capital, stock, consolidation or new property purchase — the funds are yours to deploy.
Uninterrupted business
You continue trading from the premises; the mortgage is paper, not possession.
Unlimited tax deduction
Business-purpose interest is fully deductible under Sec 37(1), improving the effective post-tax rate by 25–35%.
Rental-income leverage
Tenanted assets add rent to eligibility, or convert to LRD for cash-flow-based underwriting.
Multi-property structuring
Combine two assets — or add residential collateral — to reach the sanction the business needs.
Interest rates & terms (2026, indicative)
| Lender type | Interest rate | Typical LTV / funding |
|---|---|---|
| Public sector banks | 9.00% – 11.00% p.a. | LTV 55% – 65% |
| Private banks | 9.50% – 12.00% p.a. | LTV 55% – 70% |
| NBFCs & HFCs | 10.50% – 13.00% p.a. | Up to 70%; flexible income programs |
Rates are indicative market ranges for mid-2026 and vary by lender policy, credit profile and security. Final pricing rests with the sanctioning bank/NBFC.
Eligibility (typical)
- Self-owned commercial property with clear, marketable title
- Valid commercial use permission and completion/occupancy certificate
- Business vintage 3+ years or stable professional/rental income
- CIBIL 700+ / acceptable CMR for entity borrowers
- Post-loan obligations within FOIR/DSCR norms
- All title holders joining as mortgagors/co-applicants
Documents required
- KYC of applicant/entity and all property owners
- Registered sale/title deed chain, mutation & tax receipts
- Encumbrance Certificate (13–30 years)
- Sanctioned plan, completion/occupancy certificate, use permission (commercial)
- 3 years' ITRs & financials, GST returns, 12 months' banking
- Existing loan sanction letters & repayment track (if any)
Commercial LAP EMI Calculator
Indicative only — final rate and eligibility are decided by the lender based on your profile and security.
How CreditCares gets you sanctioned faster
Profile & lender match
We map your financials and security to the lenders — from our 80+ bank & NBFC panel — most likely to approve on the best terms.
Bank-ready file
Financials, projections, property/KYC papers structured exactly the way credit teams want to see them.
Negotiation & follow-up
We place the file with multiple lenders, negotiate rate, LTV and fees, and keep approvals moving.
Sanction & disbursal
Terms finalised, sanction issued, funds disbursed — tracked end to end by one team.
Frequently asked questions
What LTV can I expect on a commercial property?
Typically 55–70% of the lender's technical valuation — lower than residential (up to 75%) because commercial resale is slower, but the absolute sanction is often higher since commercial values per square foot run well above residential in prime markets.
Which is better for a leased-out property — LAP or LRD?
If the asset earns strong, documented rent from a quality tenant on a registered lease, LRD usually wins: eligibility is computed from rental cash flows (often 75–90% of discounted future rent) and pricing is keen. Vacant or self-occupied assets go the standard LAP route.
Can I buy another property with funds raised against my current one?
Yes — cross-funding a new office or shop from equity in an existing one is a standard structure, sometimes cheaper than a fresh purchase loan depending on your profile. We model both routes before recommending one.
Do all banks fund all commercial property types?
No — appetite varies sharply. Some lenders decline hotels or single-use buildings; others specialise in warehouses or shops. Matching asset type to lender policy is precisely what a 80+ lender panel is for.
How long does sanction take?
A clean file on a completed, occupancy-certified property moves in 2–3 weeks. Construction, refinance and industrial variants take longer owing to technical diligence. Pre-assembled legal papers are the biggest accelerator.
Related loan products
Loan Against Property — full guide
View →Lease Rental Discounting
View →Working Capital · CC & OD
View →Project & Construction Finance
View →Get the right lender, not just any lender
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Get my free eligibility check Call +91 98300 38870Disclaimer: CreditCares is a private loan consultancy / DSA — not a bank, NBFC or government body. Interest rates, LTV and eligibility parameters shown are indicative market ranges for 2026 and change with lender policy. Loan approval, pricing and terms rest solely with the sanctioning bank/NBFC. Tax notes are general summaries — consult a Chartered Accountant before claiming deductions.