Commercial Real Estate vs. Working Capital: Compare Business Funding
CRE loans vs. working capital loans — understand when property financing makes sense versus short-term operational capital.
Commercial Real Estate Loan: Commercial real estate loans finance the purchase, renovation, or refinance of income-producing or owner-occupied commercial property. Working Capital Loan: A working capital loan covers day-to-day operational expenses — payroll, rent, supplies — giving businesses the cash flow cushion they need to operate smoothly.
Commercial Real Estate Loan vs. Working Capital Loan — side by side
| Commercial Real Estate Loan | Working Capital Loan | |
|---|---|---|
| Typical amount | $250,000 – $25,000,000 | $10,000 – $500,000 |
| Typical term | 5 – 30 years | 6 – 36 months |
| Rate | 6% – 12% APR | 10% – 40% APR |
| Minimum time in business | 2 years | 6 months |
| Minimum credit score | 650+ | 550+ |
Which is right for your business?
- Commercial Real Estate Loan tends to fit best when you need purchase or renovation.
- Working Capital Loan tends to fit best when you need payroll or rent.
Frequently asked questions
Should I do a CRE cash-out refinance to solve a working capital problem?
Only if the working capital problem is structural, ongoing, and the rate difference is meaningful — and you can wait 45–90 days. For acute short-term gaps, working capital products are faster and don't encumber property.
