Loan Types and Closing Timelines
Your Guide to Expediting Commercial Loan Closings
Commercial Loan Closing Timelines
Below is a comprehensive guide to **average closing times** for various commercial loan types, measured from application submission to loan funding based on industry averages. These timelines reflect typical market conditions but may vary due to property complexity, lender processes, third-party reports, or client responsiveness.
This reference helps you set realistic expectations for financing hotels, office buildings, retail centers, or multifamily properties. Timelines assume prompt document submission and efficient third-party processes. Delays in appraisals, environmental reports, or title work can extend closing times.
Loan Types and Closing Timelines
Purchase Loan
Average Closing Time: 45–60 days
Key Factors: Property due diligence, appraisal scheduling (1–3 weeks), title clearance, and seller coordination. Retail or multifamily properties may require extended lease reviews or zoning checks.
Tips to Expedite: Provide detailed property information early; coordinate with sellers to streamline due diligence.
Refinance Loan
Average Closing Time: 30–45 days
Key Factors: Payoff verification, lien releases, and existing property data speed up the process. Cash-out refinances face stricter underwriting, potentially adding time.
Tips to Expedite: Gather current mortgage statements, property financials, and income records upfront.
Construction Loan
Average Closing Time: 60–90 days
Key Factors: Permitting, environmental assessments, detailed construction plans, and draw schedule approvals. Lenders closely monitor budgets and contractor qualifications.
Tips to Expedite: Submit finalized architectural plans, permits, and contractor details early; clarify draw schedules.
Bridge Loan
Average Closing Time: 20–40 days
Key Factors: Property valuation focus and exit strategy (e.g., refinance or sale) drive quick processing. Riskier deals face additional lender scrutiny.
Tips to Expedite: Clearly define your exit strategy; provide strong property cash flow or equity data.
SBA 7(a) Loan
Average Closing Time: 60–75 days
Key Factors: SBA approval, detailed business financials, and owner-occupancy verification. Extensive documentation requirements slow processing.
Tips to Expedite: Prepare comprehensive business plans and financials in advance; work with SBA-experienced lenders.
SBA 504 Loan
Average Closing Time: 75–90 days
Key Factors: Certified Development Company (CDC) involvement, equipment or expansion financing reviews, and SBA oversight add time.
Tips to Expedite: Engage the CDC early; ensure equipment or expansion financing details are complete.
CMBS Loan (Conduit)
Average Closing Time: 45–60 days
Key Factors: Securitization requirements, extensive property cash flow analysis, and borrower credit checks. Rating agency reviews add complexity.
Tips to Expedite: Provide detailed lease agreements and tenant financials upfront to support cash flow analysis.
Hard Money Loan
Average Closing Time: 10–25 days
Key Factors: Property-driven underwriting and limited borrower credit checks enable speed. High interest rates reflect risk, ideal for urgent or distressed deals.
Tips to Expedite: Highlight property equity; be prepared to accept higher rates for faster funding.
Mezzanine Loan
Average Closing Time: 30–50 days
Key Factors: Subordinate debt structure, intercreditor agreements, and equity-like risk assessments. Lenders evaluate project viability closely.
Tips to Expedite: Clarify senior debt terms early; provide robust project financial projections.
HUD/FHA Multifamily Loan
Average Closing Time: 90–210 days
Key Factors: Federal compliance, affordability requirements, extensive property inspections, and HUD approval. Long-term, low-rate financing justifies the wait.
Tips to Expedite: Ensure the property meets HUD standards; prepare for thorough due diligence.
Portfolio Loan
Average Closing Time: 40–55 days
Key Factors: Bank-specific underwriting and flexible terms suit unique deals. Multiple property evaluations for portfolio financing require extra time.
Tips to Expedite: Work with lenders offering portfolio products; consolidate property data early.
Agency Loan (Fannie Mae/Freddie Mac)
Average Closing Time: 45–60 days
Key Factors: Multifamily-focused with standardized underwriting. Strong property cash flows and sponsor experience speed up approvals, but agency guidelines add steps.
Tips to Expedite: Provide complete borrower and property financials; ensure compliance with agency requirements.
Permanent Loan
Average Closing Time: 40–60 days
Key Factors: Long-term financing for stabilized properties. Property income stability and borrower credit drive timelines, with appraisals and title work as key steps.
Tips to Expedite: Submit recent property income statements and tenant leases promptly.
Factors Influencing Closing Times
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Property Complexity: Specialized assets like hotels, medical offices, or mixed-use developments require detailed appraisals, adding 1–2 weeks.
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Lender Underwriting: National banks may take longer than private lenders, who prioritize speed but charge higher rates.
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Third-Party Reports: Appraisals (1–3 weeks), environmental studies (2–4 weeks), and title reports (1–2 weeks) depend on vendor availability and property type.
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Market Conditions: High demand for financing can strain lender capacity, slowing approvals.
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Client Preparedness: Delays in providing financial statements, leases, or business plans can stall progress by days or weeks.
How Montgomery Lending Supports You
Montgomery Lending is committed to streamlining your financing process. We leverage our extensive lender network to match you with the right loan product, coordinate with appraisers and title companies, and guide you through document preparation to minimize delays.
Whether you’re pursuing a fast hard money loan or a complex HUD multifamily deal, our team provides personalized support to meet your timeline goals.
Ready to Finance Your Commercial Property?
Contact Montgomery Lending today to discuss your project, explore loan options, and get a tailored timeline for your financing needs.
Reach us at [email protected] or call us to start your journey.
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