Purchasing Real Estate using the SBA 504 Loan

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SBA Loans - What Qualifies as a Small Business - By Harlan Friedman

This message will deal with how commercial Real Estate can be financed through the SBA Programs. The SBA has a loan program called the 504 program, which is specifically used for the financing of Real Estate oriented transactions, which can be a part of a business opportunity or not.

The benefit to financing a Real Estate Oriented transaction through the SBA is that a business as a start up can buy real estate as part of the initial operation of the business, or an ongoing business can be sold with the real estate as well. The SBA has a very aggressive program when Real Estate is involved.

An SBA loan can be up to $4.0 million for Owner Occupied Commercial Real Estate Transactions.

Borrower Benefits

Low down payment of only 10%

Long Repayment Terms - reducing monthly payments

Can be long term fixed rate unlike traditional 7A loans

Use of Proceeds

Purchase, construction or renovation of owner-occupied commercial real estate

Standard Loan Structure

50% First Mortgage up to 3 million, 25 years fully amortized

40% SBA 504 second mortgage, 20 years fully amortized

10% down payment by borrower.

The above is commonly known as a 50/40/10.

As you can see there is as great deal of flexibility when structuring SBA Loans, this is just another benefit that SBA financing offers the business owner.

Please continue to call us to discuss your deals. We are always expanding the services that we offer. So if it has to do with capital think of us first.

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SBA Loans - What Qualifies as a Small Business - By Harlan Friedman

About the Author: Harlan Friedman

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Harlan A. Friedman, Author & Broker is president of Lightning Commercial Funding Inc., a California Financial broker. He has more than 25 years of experience as an investment banker and financial consultant. Lightning Commercial Funding specializes in Small Business Loans and Commercial Financing exclusively, throughout the United States from the startup of new business to large commercial transactions.

Harlan is also the author of the popular book GET Your Loan Closed! Harlan Friedman's banking experience both as a branch manager for major California Savings & Loan as well as his Investment Banking experience has provided him with the knowledge and experience to provide a myriad of banking products to the general public.

Lightning Commercial Funding, Inc. was incorporated in 2005 to further assist his clientele with commercial and business financing needs throughout the United States.

Mr. Friedman graduated from The George Washington University in 1978, earning a Bachelor of Arts degree, and Western State University College of Law in 1983, earning his Juris Doctor degree. He currently holds a California Real Estate Brokers License. Reach Harlan A. Friedman at (858) 592-0659 x101 or feel free to e-mail him at harlan@loanforbiz.com.

Harlan Friedman is available for speaking engagements and individual coaching. For extensive information for business owner, over 100 pages of relevant information for the small business owner, from articles, accounting ratios, commercial loan terms and mathematical formulas. To learn the ten secrets your lender does not want you to know, order his book GET Your Loan Closed!

Click here to visit Harlan's website.

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Purchasing Real Estate using the SBA 504 Loan

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