Loan app
Many business owners consider themselves in anything but the property management business. They fail to consider how investing in real estate might benefit their company.

The top three reasons to consider purchasing commercial real estate are:
  • Generate equity – every payment made is an investment in a business owner’s future. They can leverage the accumulated wealth for further business growth or new options when the time comes to retire.
  • Preserve cash – in many cases, the monthly payment to own is less than the rent. Small business owners can use the retained working capital to buy inventory, hire new employees, purchase needed equipment or invest in other strategies to grow or improve the business.
  • Create tax savings – Just like a home mortgage, interest on commercial real estate loans is tax deductible
  • The Small Business Administration (SBA) offers several loan programs that can make investing in real estate more affordable for small business owners.


    The 7a loan program is very flexible and can be used for:
  • Refinance of Commercial Real Estate
  • Construction of a New Building
  • Refinance of Business Debt
  • Purchase of an Existing Business
  • Working Capital
  • Purchase of Real Estate
  • Tenant Improvements
  • Equipment Financing

  • The maximum 7a loan is $5 million and a business can have a tangible net worth of up to $15 million and net (after tax) income up to $5 million and still qualify.

    Some lenders offer a 100% financing option to established businesses purchasing, refinancing or constructing owner occupied business properties. The loan require that your business “owner occupy” at least 51% of an existing building or 60% of a building you would construct, but you can lease out the rest of the space, so your tenant(s) can help offset your costs – possibly dramatically.

    To qualify you must have a solid owner/guarantor with good personal credit, stable cash flow for the business for the last 2+ years (as evidenced by 2 years tax returns and interim financial statements).

    Examples of eligible owner occupied business properties:
  • General Purpose or Multi-Use buildings (buildings that could be occupied by most any type of business)
  • Professional Office Buildings for CPA’s, Attorneys and others
  • Office Condos
  • Medical Buildings
  • Dental Practice Buildings
  • Veterinary Clinics and Hospitals
  • Some Quick Serve and Fast Food Franchise Restaurants

  • The 7a program can also be used to refinance your current business or commercial real estate loans (possibly up to 25 years).

    Among other things, it can be used to refinance the following types of business debt:
  • Long term debt with a balloon
  • Business credit card debt – as long as you can show it was used for business purposes
  • Revolving lines of credit

  • 504

    The 504 Loan Program helps provide small businesses with better access to money for expansion than would otherwise be available through conventional financing. The 504 Loan Program is available to most businesses for the purchase, construction, or expansion/renovation of buildings and/or the purchase of equipment.

    In most cases, the 504 Loan Program can provide up to 90% financing, allowing borrowers to preserve working capital and receive a low, long-term fixed rate. The Program essentially consists of three components:
    1. 50% of the project’s total cost is provided by a lending institution, usually a bank.
    2. 40% is provided by a Community Development Corporation; and
    3. 10% equity is provided by the applicant small business/borrower.

    Advantages of the 504 Loan:
  • Low down payment – low equity injection of as little as 10%
  • Most Closing and “soft costs” can be financed – allowing a 90% loan to cost transaction
  • Second mortgage is fixed for 20 years with a below market interest rate – no balloon or call later
  • The first mortgage is typically a 25 year term allowing for lower payments
  • Multiple options for title and ownership giving you flexibility with tax benefits
  • Maximum project costs as high as $20+ million

  • Disadvantages: It can be summed up in three words: federal government bureaucracy. So prepare yourself for the paperwork. The application process is further complicated because of the multiple parties involved in the deal — the CDC, the SBA and the private lender (or lenders).

    With our knowledge of SBA lending options, and a dedication to understanding your business goals, we can help package a commercial real estate loan that achieves your objectives. Plus, our established relationships with SBA lenders and Certified Development Corporations help us get more small businesses the funding they need.