Purchasing Commercial Real Estate With SBA Loans

Unless you can operate your business out of your home, you’ll need some space for your company, and the Small Business Administration can help. SBA loans are financing for smaller companies, so you should be able to apply for help purchasing your commercial space under two different programs, the 7(a) and the 504. Once you’re approved for the funding, you can purchase your commercial real estate and open your doors to success.


The Loans


Both the 7(a) and the 504 loan programs offer monies for general financing and included in that general financing is the purchase of commercial property for your business. The 7(a) allows for many different industries, including auto mechanics, child care providers, hospitality services, and retail shops for your merchandise. The 504 loan covers other types of commercial real estate and it will also help you buy any equipment you might need to get your operations going.


The Lenders


The SBA doesn’t actually issue the money itself. Rather, SBA loans are secured through lenders that work directly with the agency. These lenders are in the business of helping you succeed, so they tend to be more flexible in their loan amounts, the payments, the payment schedule, and your interest rates. If you need someone to work with you and your business, this might be the way to go, as these experts understand the difficulties you face when you’re just starting out or trying to grow and the commercial property needs associated with them.


The Process


Securing either a 7(a) or 504 loan will be much like the same process as securing a loan from your bank. You will need to fill out an application and submit a business plan and financials to show that you are credit worthy. An advantage over traditional banks is that oftentimes the underwriting process is conducted “in-house,” which means you may be working with someone who is more flexible in the approval process, or at the very least, willing to talk with you if there’s problem prior to denying your request for commercial real estate funding.


SBA loans are for small businesses only. They will not be snatched up by big corporations. The companies that offer them are interested in helping you succeed. This is why the contract is tailored to your specific needs. You’ll receive the cash you need and a payment plan you can work with, which will help keep your company’s credit in good standing. Once your loan is approved, you’re good to go with your commercial real estate property purchase.

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