The Fiirm knowledge base
Practical, current answers about business-purpose commercial real estate financing — without the sales fog.
Start with the same Mentor borrowers use to check the current rules.
SBC
Almost never — and the reason has nothing to do with the quality of the report. A commercial appraisal has to be ordered through the lender's AMC, with the lender as the named client. An appraisal addressed to the borrower is unusable no matter how good it is. Here is why that structure exists, when a prior lender's report can still be used, and how to avoid paying for two appraisals on the same building.
August 31, 2026
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An existing commercial appraisal can be up to six months old at closing, and not a day older. Before that wall there are two earlier triggers: an outside appraisal past three months needs a current interior inspection, and as of July 2026 an existing report past four months triggers a reinspection. The clock runs to your closing date, not your application date. Here is what starts it, what each tier costs you, and how to sequence a slow deal so the report survives.
August 31, 2026
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Sometimes. The rule is written as a convertibility test, not a banned-use list: a property with a special use component is ineligible unless it can be readily converted to standard retail, warehouse or office space with limited cost and a reasonable timeline — under 90 days. That reframes the question from "is my building unusual" to "if the operator vanished, how fast and how cheaply does this become ordinary space." Here is how to run that test on your own building.
August 31, 2026
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Yes. A property used commercially inside a residential zoning district — typically operating under a special use permit or conditional use permit — is eligible under our small balance commercial program, but at a maximum LTV of 50%. That is roughly half the leverage most buyers model, and it is the single fact that decides whether these deals close. This page explains what triggers the cap, how legal conforming, legal non-conforming, and special use permit properties differ, and how to confirm your zoning before you write an offer.
August 31, 2026
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An inherited commercial building is eligible for a rate-and-term refinance under The Fiirm's SBC program. Cash-out is an exception, not a right. Probate must be cleared and title vested in the borrower before anything closes. Paying off another heir's share is provided for separately — but only where that equity interest is documented.
August 31, 2026
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Under The Fiirm's SBC program, a land contract or contract for deed on a commercial property is an allowed structure, and paying off the seller is underwritten as a refinance rather than a purchase — as long as the contract is more than twelve months old. That classification is what lets your loan be sized against today's appraised value instead of the price you agreed to years ago. Below twelve months, the guideline does not say what the transaction becomes instead, and cost basis comes into play. This page covers the classification line, the value basis, the seasoning provision, and exactly where the guideline is silent.
August 31, 2026
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Exercising an option to purchase is underwritten as a purchase transaction, with the injection sized off the purchase price. Accumulated rent credits may count as evidence of that injection, but only with a lease agreement stating the credited amount and cancelled checks proving payment. Base rent gets checked against market, and rent credits count toward injection but never toward reserves.
August 31, 2026
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Six months of liquid reserves, measured in months of the qualifying principal-and-interest payment on the subject property — not a flat dollar figure. That means the requirement scales with your loan. Retirement accounts count at 70% of balance, gift funds do not count at all, and cash-out proceeds can satisfy reserves outright if the deal FICO is above 700.
August 31, 2026
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No. Foreign nationals, applicants on temporary status or a work visa, and irrevocable trusts are all ineligible on our small-balance commercial program. Eligible borrowers are for-profit US entities wholly owned by US citizens or permanent resident aliens, and of the trust family only a revocable trust qualifies. This page walks the entity and guarantor tests in the order underwriting applies them, including the layered-ownership rule that kills most structures and the New York and New Jersey restrictions.
August 31, 2026
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Owner Occupied means your business, your residence, or an entity you majority own or control uses 50% or more of the property's net rentable area. Investor means at least 50% of effective gross income comes from arm's-length third-party tenants — or the property is a type that is always Investor. The classification decides your coverage test, your experience standard, and your document list. Underwriting can also reclassify a property against the borrower's expectation.
August 31, 2026
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Global Debt Service Coverage blends the operating business, the subject property, and the guarantor personally into one ratio. Owner-occupied files need 1.20x, and since July 10, 2026 only 50% of total annual personal debt is counted against you. Here is the formula, what income is included and excluded, a worked file showing how the numbers assemble, and what happens when a deal misses coverage.
August 31, 2026
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Almost never, for most small-balance borrowers. Every property we lend against gets a database-level Environmental Transaction Screen that we order ourselves. A full Phase I is the escalation, and the only place our guidelines name it as a possible requirement on a defined group of loans is No Doc Streamline files with a DSCR below 1.15x — and even there the language is discretionary, not mandatory.
August 31, 2026
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Yes, there is an experience requirement on investor property, and it is lower than most first-time buyers assume: owning one property, including your own home, for at least 12 months makes you eligible at up to 70% LTV. Getting to the program maximum LTV takes more. Owner-occupied deals are graded on business experience instead, and partial owner-occupied investor properties are exempt from the investor experience requirement entirely.
August 31, 2026
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This is a mortgage on the building, not a business loan. Restaurant, bar and daycare properties require the operating business to show three years of continuous operating history before the file is eligible at all, and full program leverage does not arrive until five years. Restaurants and bars also carry a refinance-first rule that limits when you can purchase, and the appraisal values the real estate only with no credit for goodwill, inventory or equipment.
August 31, 2026
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You can cash out of a commercial property owned for less than a year. Under twelve months of ownership, seasoning does not block the loan — it changes how the maximum is calculated and how much you have to prove. Our program may size the loan against your cost basis rather than the appraisal unless you can document the acquisition, a 15 to 20 percent capital investment at purchase, and unfinanced capital expenditure supporting the higher value.
August 31, 2026
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Most commercial financing content lists what lenders will finance. The more useful list is the other one. Some property types are declined on collateral alone, before credit, income or DSCR is read — and a handful of them become financeable through a specific exception most borrowers never hear about. Here is the actual line, and the four rules that cap leverage on properties that clear it.
August 31, 2026
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Yes, with a precise limit. Deposits from Cash App Business, Venmo Business and similar payment platforms can count as business revenue when they land in your business operating account and you can document where they came from. What cannot be used is a personal Venmo or Cash App statement standing in for a business bank statement. The distinction decides whether a file works.
August 31, 2026
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