SBA 504 Loans: “Owner Occupied” Commercial Mortgage Loans
SBA Fixed Rate Loans
The 504 Program has historically been the best way to purchase “owner occupied” commercial real estate with the least amount down, but before you read up on what it offers, there is another SBA guaranteed loan program that can sometimes be a better fit – it is called the 7a and there are a few lenders who will actually offer a 25 year fixed.
The 25 year fixed rate 7a may be your best bet if you have at least 10% down.
The 504 may still be the best way to get 85% to 90% financing with all or part of the financing fixed for 20 to 25 years, especially if you have good credit and are financing a multi-use property.
100% Financing with the 7a
The 504 gives you high leverage, but there is a possibility of getting true 100% to 125% financing via the 7a. There is a new program that is only for established, cash flowing businesses buying, refinancing or building a “general purpose” or “multi-use” property. It is not a fixed rate, but it is worth contacting GCS for a Free Consultation.
If you are looking to finance a “Multi-Purpose” building in a “Low Income” census tract then excellent long term financing is available via the 504. This program offers a 30 year amortization, a low 7 year fixed rate with a 3 year interest only period on the front end of the loan. Please contact us for more info.
10% Down Commercial Real Estate Financing with the SBA 504 LoanThe SBA 504 loan program (aka CDC 504 loan program) has historically been under-utilized and it and the SBA 7a are two of the best commercial real estate loans available for small and mid-sized businesses at the current time.
Higher Loan Amounts, Larger Businesses & Refinancing Now Possible With the SBA 504
$12 million+ transactions are now possible with the 504 loan program as a result of changes to SBA guidelines. The new maximum 504 (second) mortgage loan is now $5 million for “regular” loans and $5.5 million for Green/Energy Efficient businesses and also for qualifying Small Manufacturers.Energy Efficient businesses and those who produce their own renewable energy, as well as Small Manufacturers with primary NAICS codes of 31, 32 and 33 are also eligible for larger and multiple SBA 504 loans without running out of eligibility.