Plain English
Commercial Lending Glossary
The terms we use, decoded. Start with sponsor, the borrower who owns the deal and brings the equity, then the ratios and structures lenders care about most.
- Sponsor
- The person or company that owns and drives a commercial deal, the borrower who puts up the equity, signs on the loan, and executes the business plan. Lenders underwrite the sponsor as much as the property. Full definition →
- Sponsor Equity
- The sponsor’s own cash in the deal, their skin in the game. Lenders expect the sponsor to bring this; PeerSense places the debt on top of it. We do not raise it for you. Full definition →
- LTV (Loan-to-Value)
- The loan amount as a percentage of the property’s value. Lower LTV means more sponsor equity and an easier approval at better pricing. Full definition →
- DSCR (Debt-Service-Coverage Ratio)
- Net operating income ÷ annual loan payments. Most lenders want 1.25x or higher, the property earns 25% more than the debt costs. Full definition →
- Debt Yield
- Net operating income ÷ loan amount. A lender’s downside cushion that holds up regardless of interest rate or appraised value. Full definition →
- Interest Reserve
- Loan funds set aside to cover interest during construction or lease-up, before the property produces enough cash flow to pay it. Full definition →
- Value-Add Property
- An asset bought specifically to improve, renovate, re-lease, or reposition, to raise its income and value. Full definition →
- Stabilized Property
- A fully-leased property with steady, proven income. The easiest profile to finance and the one that earns the lowest rates. Full definition →
- Credit Box
- A lender’s specific rules, loan size, LTV, geography, asset type, credit, that define exactly what they will and won’t approve. PeerSense matches your deal to lenders whose box already fits. Full definition →
- C-PACE Loan
- Long-term, fixed-rate financing for energy, water, and resilience improvements, repaid through a special assessment on the property tax bill. Full definition →
- Recourse vs. Non-Recourse
- Recourse means the sponsor personally guarantees the loan; non-recourse limits the lender to the property itself (with standard “bad-boy” carve-outs).
- Bridge Loan
- Short-term debt (often 12–36 months) that closes fast to acquire or reposition a property, then is refinanced into permanent debt once stabilized. Full definition →
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