Asset-Based Commercial Real Estate Loans

Asset-based vs equity-based vs borrower-based underwriting

"Asset-based" and "equity-based" describe the same idea: the loan is sized by the collateral and the equity behind it. The lender asks, "If I had to take this property back, would I be repaid?" A borrower-based lender, such as a bank or an agency lender, asks a different question first: "Can this sponsor and this property carry permanent debt for years?"

That difference drives everything else. Asset-based lenders accept transitional assets, vacancy, deferred maintenance, credit blemishes and tight timelines that a bank will not, and they charge for that flexibility with higher cost and lower leverage on value.

Lending off the appraisal: as-is value, LTV and debt yield

The core sizing metric is loan-to-value on as-is value. Many asset-based bridge lenders cap leverage around 65–75% of as-is value, with the exact limit depending on asset type, market, condition and the lender's own book.

For income-producing assets, lenders layer on income tests:

• Debt yield: NOI divided by the loan amount. It ignores rate and amortization, which makes it a clean check for interest-only bridge debt.
• DSCR: NOI divided by debt service. Bridge lenders are often more flexible here than banks, especially when there is an interest reserve or a clear lease-up plan.

The loan is the lowest of what LTV, debt yield, coverage and (for value-add deals) loan-to-cost allow. Model all of them with the debt yield and DSCR calculator.

Valuation method matters too. Some lenders require a full MAI appraisal, others will close on an internal valuation, a BPO or a recent existing appraisal, which is one reason some lenders close faster than others.

Hard money vs bank vs debt fund

• Hard money and private lenders. Lend their own or investor capital off a balance sheet. Fastest decisions, most tolerant of condition and credit, lowest leverage, highest cost. Typical sweet spot is smaller and mid-size loans and simpler capital stacks.
• Debt funds. Institutional or semi-institutional capital, often lending on larger transitional deals. More structure (future funding for capex, interest reserves, cash management), more third-party reports, and pricing that is usually between hard money and bank debt.
• Banks. Lowest cost, but slower, recourse-heavy and focused on stabilized cash flow, global financials and deposit relationships. Banks generally avoid heavily vacant or distressed assets.

Our network is asset-based, private and balance-sheet bridge lenders for roughly $1M–$50M loans. We do not cover ground-up construction.

Which property types work with asset-based lenders

Asset-based lenders cover most commercial property, including 5+ unit multifamily, mixed-use, retail, industrial, self storage, hotels and mobile home and RV parks. Specialty and special-use assets such as gas stations, churches and event venues have a smaller lender pool and lower leverage because the buyer pool on a foreclosure is thinner.

What drives cost on an asset-based loan

• Interest rate, usually interest-only, sometimes floating.
• Origination points at closing (a point is 1% of the loan).
• Exit fee on payoff, charged by some lenders and not others.
• Extension fees if you need more time past the initial term.
• Third-party and legal costs: appraisal, environmental, property condition report, lender counsel.
• Prepayment terms: minimum interest or yield maintenance periods that matter if you exit early.

The bridge loan cost calculator rolls these into one all-in number for a given hold period.

How to compare asset-based lenders

Asset-based lenders differ more on criteria than on price: max LTV by asset type, whether they pull credit, how they value the property, minimum and maximum loan size, and how fast they can close. On the compare page you enter the deal once and see every matching lender anonymously with max loan, rate, points, term and total cost. Pick up to three; your first pick has six business hours to confirm, and contact details are released only when a lender confirms. It is free for borrowers, and we are not a lender or broker.