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Purchasing Real Estate using the SBA 504 Loan
Written by: Harlan FriedmanArticle Overview: For an owner occupied purchase of real estate a borrower espescially in today's economic climate should seriously consider the use of SBA Financing. Also if Congress passes the Recovery ACT proposals this amount may be increased to 5 Million for the 40% debenture, thus giving a much larger buying opportunity for Small Business
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Free Download - SBA Loans - What Qualifies as a Small Business By Harlan Friedman |
Purchasing Real Estate using the SBA 504 Loan
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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Non-Real Estate Loans Private Lenders
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Article Tags: Commercial Real Estate, SBA 504 Loan, Small Business
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About the Author: Harlan Friedman RSS for Harlan's articles - Visit Harlan's website  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. Click here to visit Harlan's website   Purchasing Real Estate using the SBA 504 Loan SBA Guarantee Fee Explained SBA Loans What Qualifies as a Small Business The Various Roles Banker Broker and BDO SBA 7A Loan for Business Opportunities and Real Estate Acquisition |
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I am a life coach and also an entrepreneur. I work with people from all walks of life, Real Estate Agents/Brokers, Entrepreneurs, Businessmen.
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