In the banking and finance world, there are two main types of business loans: investment property mortgages and owner-occupied real estate loans. 

An investment property mortgage is given to a lender whose commercial property is used as the main collateral alongside revenue generated from leasing or renting out the commercial property to secure a commercial loan.

An owner occupied loan is given to a lender based on the lender’s business revenue and its collective assets as collateral, and not solely the value of the building. The borrower will occupy the commercial property and use cash flow from its business to pay the mortgage, as opposed to using revenue from tenant occupancy which can be unpredictable from time to time.

Owner-occupied Real Estate Loan: Top 6 Questions Answered