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Commercial Real Estate Loans

Commercial Real Estate Loans

The Best Kept Secrets About SBA 7(a) Commercial Real Estate Loans


How to Get 100% Financing

NO Commercial Real Estate Loan DOWN PAYMENT REQUIRED for SBA 7(a) commercial real estate loans!


ATTENTION Business Owners

Are you currently renting your property?

Would you prefer to BUILD EQUITY in your business?

Pre-qualify in 5 Minutes with No Impact to Your Credit Score
Does it make sense to keep your money invested in growing your business?

Give Us Your Info

Did you know that owning instead of renting can increase your cash flow?

Do you have a large rental expense? Does it make sense to replace that rental payment with a commercial mortgage loan?

Get Your LOI (Letter of Intent)

Did you know that an SBA commercial real estate loan is affordable?

A $1 million SBA business real estate loan is just under $7,000 a month.

Your Property is Valued

Do you have a large upcoming balloon payment?

Get Your Funds

Refinance and improve your rate term or even your monthly payment.


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COMMERCIAL REAL ESTATE: DO I BUY OR DO I LEASE?

The general rule of thumb is if you plan on occupying the same space for at least seven years than the purchase is usually less expensive than the rental.

Why?

The cost to purchase is much more expensive upfront versus your rental costs. The bigger question is whether you have the funds to invest in the down payment for the mortgage.

IMAGINE A 100% BUSINESS PROPERTY FINANCING SOLUTION!

Let me ask you a question.

Are you better off taking money to use as a down payment or investing that money in your business to grow and generate more revenue over time?

  • GET A 25 YEAR FULLY AMORTIZING TERM
  • NO BALLOON PAYMENTS
  • MINIMUM OUT OF POCKET EXPENSES
  •  BUILD EQUITY IN YOUR BUSINESS

loan amount commercial real estate loans

Do you have 5 minutes?

If “YES” we can get you prequalified.

Here are the general eligibility and credit commercial real estate loan requirements:

FICO:
675 minimum

Cash Flow:
$1.15 debt service coverage ratio (DSCR)
3 yrs. business tax returns
Interim Balance Sheet and P&L
51% Owner-occupied
Zoned for Commercial or Industrial

LTV:
90% LTV Max
Operating Businesses Only
Two plus years in business

Unfortunately, we will not be able to help you if:

  • You are a developer or landlord, and you do not occupy at least 51% of the property.
  •  No bankruptcies in the last three years
  • No foreclosures in the last three years
  • No prior default on loans that are government-backed
  • No outstanding tax liens
  • No construction on an empty lot
  • No building a new structure
  • No investment properties
  • No real estate flip projects

Apply For a Small Business loan

The Commercial Lending Process

We can get you prequalified in five minutes. Once you receive your preapproval, we will need:

  • Personal Information
  • Loan Information including the amount to be purchased or refinanced
  • Business Ownership information
  • Property Ownership information
  • Business Tax returns – last three years
  • Personal Tax returns – last three years
  • Year to Date P&L and Balance Sheet

There will be a Letter of Intent (along with a refundable $5,000 deposit)

After credit approval, there will be a property appraisal and an environmental review (Phase I).

The closing will have additional Business Documentation, the lease agreement, and the load document preparation.

If all things go smoothly during the application process, expect at least 45 days from start to finish.

What are the differences between an SBA 504 Loan and the SBA 7(a) Loan?

Types of Commercial Real Estate Loans

The loan size is the first major distinction between the SBA 504 and the 7(a). The 504 has a minimum loan size of $125,000 with a maximum of $20M (or more) while the 7(a) has a minimum of $50,000 and a max of $5M.


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Commercial Real Estate Loan Rates

The 504 and 7(a) have fixed and variable rates respectively. (There are some fixed rate options on the 7(a).

The terms for the 504 are 20 years for real estate and ten years for equipment.

The SBA 7(a) loan is twenty-five years for commercial property, up to 10 years for business equipment and acquisition, 5 – 7 years for working capital and a weighted average for mixed use.

Why SBA 7(a) Loans are the Secret Ingredient

Many small business owners need to acquire commercial real estate to grow their companies. As you know, the Small Business Administration (SBA) is a designated government sponsored agency that offers these businesses commercial real estate loans.

The SBA 7(a) loan program is especially critical in today’s marketplace. Operational requirements need capital to grow, and because of the credit crisis, there is a dearth of bank and commercial loan lenders that provide commercial real estate loans.

Uncle Sam recognizes that the greatest recession since the great depression stifled economic growth in America. With many banks teetering on collapse these commercial loans lenders all but closed their doors to small businesses.

Washington D. C. recognized the need to bolster the economy, and one of the aggressive steps they took was to encourage the use of the SBA programs.

Now, remember, the Small Business Administration doesn’t make the loan. The role they play is to help facilitate the financing. They accomplish this by guaranteeing up to 90% of the business loan made by either the banks or those institutions specializing in SBA financing.

One huge advantage of the SBA real estate loan are the terms. Many commercial real estate loans only have terms of 5 to 10 years. This program by the

SBA enables you to amortize the loan over 20 to 25 years.

These terms, of course, are a tremendous relief on the cash flow of any business. When you combine the fact that you can do this without a down payment, you can see how this is a powerful one-two punch.

You can keep your cash working for you while reducing your monthly payments.

Think about it.

Most conventional commercial real estate loans offered today require a substantial down payment. Traditionally the LTV (Loan to Value) is 90%. However, many institutions have cut their LTV from 75% down to 58% to 63%.


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Prime Commercial Lending Rate

You can receive a 25 year fully amortizing term loan with no balloon payments.

With our 100% financing, you’ll have minimum out of pocket expenses. This funding means rather than tie up your capital in a building you can be putting it to work growing and expanding your business.

You’re currently looking at variable rates between 5.50% and 6.75% and spreads (prime rate plus) between 1.5% to 2.75%

Imagine all this with a 3-year prepayment penalty declining from 5% in year one to 1% in year three.

The qualifications are simple

You need a FICO credit score of 675, and you must be occupying at least 51% of the property. You must be prepared to have this loan 100% collateralized. You’re looking at all your inventory, receivables, and equipment encumbered by this loan.

Plus, you will have a blanket guarantee extending to your personal residence. Our suggestion is to read this informative guide:

ENTREPRENEURS’ GUIDE TO APPLYING FOR AN SBA LOAN

for additional information.

Better yet, CALL 888.456.9223 now to speak to an underwriter.

We can get you pre-qualified in only 5 minutes.