Texas Commercial Real Estate Lending Process Explained
September 18, 2025
Securing financing for commercial real estate projects in the Southeast Texas Gulf Coast region can be time-consuming, especially when navigating complex loan requirements and application processes.
Whether you’re a business owner looking to purchase new property or a real estate investor seeking to expand your portfolio, understanding the commercial real estate lending process is crucial for making informed financing decisions and reducing the required effort.
Texas Gulf Bank has supported business owners and real estate investors throughout the region for decades. Find out what you need to know about Texas commercial real estate loans – from understanding the different loan types to successfully navigating the application process.
What is the Commercial Real Estate Lending Process in Texas?
A commercial real estate loan provides financing for business-related property purchases, construction projects, or refinancing existing commercial properties. Unlike residential mortgages, commercial loans typically have shorter loan terms, higher down payment requirements, and more stringent qualification criteria.
These loans serve various purposes for different types of borrowers:
- Business owners use owner-occupied commercial loans to replace rent on their current property or acquire new property to operate their business.
- Real estate investors utilize non-owner-occupied commercial loans to acquire investment properties for rental income or future resale.
- Developers and contractors secure construction loans to fund ground-up development projects.
What Are the Types of Commercial Real Estate Loans?
Commercial real estate financing encompasses several loan types, each designed to meet specific project requirements and borrower needs. Let’s take a closer look at how each loan type works.
Owner-Occupied Commercial Loans
Owner-occupied commercial loans help business owners purchase properties where they will conduct their primary business operations. In Texas, businesses must occupy at least 51% of the property, while the remaining portion may be rented out to tenants.
Some common examples of owner-occupied commercial real estate loans include:
- Office buildings for professional service companies.
- Retail spaces for restaurants and stores.
- Manufacturing facilities for production companies.
- Medical buildings for healthcare practices.
Non-Owner-Occupied Commercial Loans
Non-owner-occupied commercial loans cater to individual partners who purchase properties primarily for investment purposes. These loans focus heavily on the property’s cash flow potential and the borrower’s experience managing investment real estate.
The typical non-owner-occupied commercial properties include the following:
- Multi-tenant office buildings.
- Shopping centers and retail complexes.
- Apartment buildings and multi-family properties.
- Industrial warehouses and distribution centers.
Construction Loans
Construction loans provide short-term financing for building new commercial properties or major renovations. These specialized loans typically have terms of 12 to 18 months and convert to mini-permanent financing upon project completion.*
*NOTE: Some creditors may offer one-time-close construction loans that include a permanent mortgage, but Texas Gulf Bank’s one-time close construction loans only include a mini-permanent mortgage.
Texas Gulf Bank offers several construction loan options:
- Owner-occupied construction loans for businesses building new operational facilities.
- Non-owner-occupied construction loans for investment property development.
- Ground-up construction loans for comprehensive development projects from land acquisition through completion.
- Acquisition financing for purchasing existing properties that require significant improvements.
How Does the Commercial Loan Application Process Work?
Navigating commercial real estate lending requires thorough preparation and a clear understanding of loan requirements. The process involves key steps from application to final approval to assess your financial capacity and project viability.
Lenders such as Texas Gulf Bank evaluate each borrower’s creditworthiness and the property’s income potential, so it’s essential to understand how these factors are assessed before applying for a commercial real estate loan.
Required Documentation
Commercial loan applications require extensive documentation to support your loan request. Fortunately, we offer a streamlined loan application process to minimize the effort required.
To get started, you will need to complete a commercial loan application that our local lending team will review. We will also require additional documentation to support your loan application. Gathering these items helps ensure smooth processing and faster loan approval:
- Tax returns for the past three years (both personal and business).
- Current personal financial statement detailing assets, liabilities, and net worth.
- Business financial statements that include balance sheets and net income statements.
- Project budgets with detailed cost breakdowns for construction or renovation.
- Property documentation such as surveys, plats, and building plans.
- Professional references from previous projects or business relationships that prove your knowledge and capability in your specific business sector.
Financial Evaluation
Once we receive your completed loan application and supporting documentation, our lending team will review the key financial aspects of your company to ensure your qualifications for the type of loan you are applying for. The review may include the following:
- Net Income evaluation to determine the health of your cash inflows and outflows.
- Debt-to-income ratio showing your ability to handle additional debt service.
- Liquidity and cash reserves providing security for loan payments during construction or economic downturns.
Borrower Evaluation Criteria
Our team will evaluate multiple aspects of your financial profile and project proposal to determine loan approval and terms. Understanding what we are looking for when performing the review will help you better understand the lending process:
- Cash flow analysis to ensure sufficient income to cover the new debt.
- Credit history review to examine payment patterns and financial responsibility.
- Market analysis to confirm the viability of the property transaction.
- Construction timeline to verify realistic completion schedules.
- Professional team qualifications to ensure qualified architects, contractors, and other specialists are involved in the project, if necessary.
Why Work with Texas Gulf Bank for a Commercial Real Estate Loan?
Texas Gulf Bank specializes in commercial real estate lending throughout the Southeast Texas Gulf Coast region. For over 110 years, we have offered personalized service and local market expertise to customers in our area.
Our experienced commercial lending team understands the unique challenges facing business owners and real estate investors in this market, making us an ideal partner to help drive business growth.
We focus on building long-term relationships with our commercial borrowers, providing ongoing support beyond the initial loan closing. Our lenders conduct thorough due diligence, including site visits for ongoing projects and reference checks with previous business partners.
Because all of our lending decisions are made in-house, you benefit from a clear and transparent process. We will keep you informed about our progress and provide you with an upfront answer according to your timeline.
Once we receive your loan application and all requested documentation, we will provide you with a prompt lending decision.
Let’s Get Started with Your Commercial Real Estate Loan
Ready to begin the commercial real estate lending process? Success starts with thorough preparation and collaboration with helpful lenders who understand your unique needs and local market conditions.
Our experienced commercial lending team works closely with business owners, developers, and individual partners to structure financing solutions tailored to meet your specific needs. We can help you get started by having a conversation about your business situation and property goals.
We are committed to your success, offering personalized service and prompt decision-making for qualified borrowers throughout the Southeast Texas Gulf Coast region.
Contact us today to discuss your commercial real estate financing needs. Experience the difference that local expertise and personalized service can make for your next business opportunity.
All loans subject to credit approval