Have you heard that your business credit could be the key to buying real estate? While personal credit and income are still required for most traditional home purchases, savvy investors may be able to use business credit to help them get financing for rental properties, commercial spaces, and mixed-use buildings — helping reduce personal risk while expanding their opportunities.

We'll explore more here.

Can you use business credit to buy a house?

Yes, you may be able to use business credit to purchase a house as long as you are buying it only for investment purposes. A loan for a home you intend to live in now or in the future is considered a consumer loan. 

Some investors prefer to use business credit to help reduce personal risk while opening doors to unique financing options that traditional mortgage loans don't offer.

Most residential home purchases still require personal credit and income verification. Business credit may help when you're buying rental properties, commercial real estate, or mixed-use buildings through a limited liability company (LLC) or corporation.

Can you use business credit to buy residential property?

The short answer: 

• No, for a primary residence (a home you intend to live in) 
• Yes, for investment properties

Unless you can pay for a property with cash, you’ll need to get a mortgage loan. 

Traditional residential mortgages focus on personal income and credit scores. Lenders want to see your W-2s, tax returns, and personal credit history when you're buying a home to live in. Consumer disclosures and rules apply to these loans. 

Investment property loans may offer more flexibility. Debt service coverage ratio (DSCR) loans, hard money lenders, and portfolio lenders evaluate the property's rental income potential rather than personal finances. These programs may consider your business credit profile and cash flow.

Portfolio lenders are banks or financial institutions that make loans and continue to service them rather than sell them to other entities. Because they aren’t planning on selling the loan, they may have more flexibility. 

If you own rental properties through an LLC, business credit can help you scale your portfolio without hitting personal debt-to-income limits.

Key loan types that may work with business credit:

• DSCR loans (focus on rental income)
• Portfolio lender programs
• Commercial mortgages for LLCs
• SBA loans for mixed-use properties

How to use business credit to help buy real estate

DSCR loans

DSCR loans evaluate whether the property's rental income can cover the mortgage payment. A ratio of 1.0 or higher means the rent covers the debt service.

What lenders want to see:

• Business bank statements (12-24 months)
• Property rent roll or lease agreements
• Business credit score (typically 680+ preferred)
• Down payment (usually 20-25%)

Most DSCR lenders still check personal credit but focus primarily on the business financials and property cash flow.

Commercial mortgages for LLCs

A commercial mortgage may be used to purchase a business property (like a bakery or an auto repair shop). It may also be used to purchase multi-unit investment properties; for example, a triplex where all three units will be rented out. When your LLC owns investment properties, commercial mortgages treat the purchase as a business transaction rather than a personal one.

Key requirements:

• Established business (LLC is the most common)
• Strong business credit profile
• Significant down payment (25%–30%)
• Personal guarantee may be required

Commercial mortgages typically offer 20–25 year amortization with 5–10 year terms, meaning you'll need to refinance or pay off the balloon payment when it comes due. 

Hard money loans

Hard money lenders focus on the property's value and your ability to execute the deal rather than traditional credit requirements. These short-term loans (6–24 months) work well for fix-and-flip projects or when you need to close quickly.

Hard money lenders evaluate:

• Property's after-repair value (ARV)
• Your real estate experience and track record
• Exit strategy (sale or refinance plan)
• Down payment (typically 20%–30%)

Most hard money lenders care less about credit scores and more about the deal itself. They'll lend 70%–80% of the property's ARV, meaning you need enough cash or business credit lines to cover the gap between purchase price and loan amount.

Hard money loans may close fast, possibly within a few days, compared to up to a few months for traditional financing. This speed advantage may help you compete with cash buyers in competitive markets.

Business credit becomes valuable for covering renovation costs, carrying expenses, and bridging funding gaps that the hard money loan doesn't cover. Many investors use business credit cards or lines of credit alongside hard money loans to fund the complete project.

Interest rates typically range from 10%–18% with points (1%–5% of loan amount), making these expensive but powerful tools for experienced investors.

SBA 504 and 7(a) loans for mixed-use properties

SBA loans work for properties where your business will occupy at least 51% of the space for your business operations. You may not use the property as a primary residence where you live. 

SBA 504 loan structure

The typical structure for one of these loans is:

• 10% down payment 
• 40% SBA debenture (long-term, fixed rate)
• 50% bank financing

SBA 7(a) loans offer more flexibility but may require a larger down payment for real estate purchases.

Both programs consider business credit scores but also review personal credit since personal guarantees are required. A FICO^® SBSS^sm score may be required. This score can evaluate both personal and business credit, along with financial information, in a single score. 

Business lines of credit plus personal mortgage

Some investors use business credit strategically alongside traditional financing. A more common approach in this situation would be to buy a multi-unit property and live in one of these units, using a residential loan to purchase the property and business credit to help with repairs and renovations on the units that are rented out. 

Common approach

• Secure primary mortgage with personal credit
• Use a business credit card or line of credit for down payment, repairs, or gap funding
• Business credit provides working capital for property improvements

This method requires good personal credit for the mortgage and business credit cards, and may require strong business credit for a business line of credit. 

Minimum business credit requirements to buy real estate

Most real estate loans involve a personal credit check and a personal guarantee may be required. While lenders will have their own qualification requirements, here are common guidelines: 

How personal credit still matters

Even when using business credit, your personal credit scores often play a role in investment or commercial real estate transactions.

Personal guarantees 

Personal guarantees (or PGs) remain standard for many business real estate loans, especially for smaller or younger businesses or those without a lot of experience in the industry. Lenders want as many options as possible to collect if the business defaults on the loan, which means they'll often review your personal credit history. While the real estate may serve as collateral, it may not bring enough money after expenses to cover the entire loan amount. 

Credit overlays 

This is another way to describe credit score requirements, and these vary by lender. Some require minimum personal FICO scores of 680–720, even for business-focused loan programs.

Others, like hard money lenders, may not care about your personal credit, as they focus more on the financial details. 

Maintaining strong personal credit (usually 720+) may give you more lending options and better rates, sometimes even when your business credit and business qualifications are the primary factor.

Exceptions exist with some portfolio lenders and hard money lenders who focus purely on property value and business cash flow.

Step-by-step process to leverage business credit to help purchase real estate

1. Form an LLC and build business credit

An LLC is the preferred business entity for most real estate investors, but check with your advisors to make sure it’s right for your goals. Regardless of whether you form an LLC or corporation, establish your business entity and start building credit relationships with vendors and other companies that report to business credit bureaus. You'll need at least 12–24 months of business credit history for most programs.

Get Nav’s free guide to building business credit. 

2. Compile business financials and bank statements

Gather 12–24 months of business bank statements, profit and loss statements, and balance sheets. Clean, consistent cash flow can strengthen your application.

3. Research lenders offering DSCR, hard money, and commercial products

Traditional banks, credit unions, and specialized investment property lenders offer different programs. Portfolio lenders often offer more flexibility than banks that sell loans to government-sponsored enterprises. Hard money lenders may offer 100% financing. 

4. Prepare collateral, down payment, and personal guarantee

Most business real estate loans require substantial down payments (20%–30%) and may need additional collateral or personal guarantees despite strong business credit. If collateral is involved, an appraisal may be required. 

5. Close the loan with proper entity structure

Ensure the lien is filed against your business entity, not you personally, if your goal is liability protection.

Pros and cons of using business credit for real estate

Frequently asked questions