Real Estate Loans

Please note that our minimum loan requirement is $250,000.

Most traditional sources of real estate financing such as banks, savings & loans, insurance companies and pension funds, can be difficult to work with for buyers, brokers and developers. Terms have tightened and their conditions are even tighter. With the phenomenon of the five year call provision on many real estate loans, the property owner will be confronted with the issue of renewal with the lender at the terms and conditions the lender then chooses, if the lender chooses to renew the loan at all.

The SBA will guarantee 75% of up to $1,000,000 for purchase of real estate, fully amortized over 25 years with no balloon payments or pre-payment penalties.

Loan to Value

The SBA requires a 10% down payment on a real estate loan.   In essence, the SBA is making a business loan secured by real estate rather than a classic real estate loan. Therefore, the emphasis is on business cash flow, earnings, balance sheet and management capabilities, not Loan to Value.

Commercial/industrial property refinance

If your original property loan included a balloon payment, an SBA loan can refinance your property on a long term basis and as long as we can verify that the entire loan to be refinanced was used for the subject property and not for investment or other purposes. Also, the balloon payment must be due within the next 12 months. Note: we cannot refinance a fully amortized.  Also, we normally have to demonstrate a payment savings up 25% in order to qualify a real estate refinancing loan.

Types of property

You can purchase any kind of property as long as it is for business use. It can be commercial, industrial, retail shop, office condominium, single purpose (such as a gas station, car wash, motel, restaurant, etc.). However, the business has to occupy 51% of the property if purchased and 67% of the property if constructed.

Land purchase

If the property will be used for business purposes, now or in the near future, you can purchase land with the SBA loan proceeds.

Construction

As long as the business will occupy at least 67% of the total building size, you can use SBA loan proceeds for construction.  This construction loan will be interest only during the construction period and will convert to a permanent 25 year, fully amortized loan at the end of construction.

Key Benefits

• Fully Amortized Term
• No Prepayment Penalties
• No Balloon Payments
• Lower Down Payment Percentage