When To Use SBA Loans For Commercial Real Estate

SBA loans are used regularly for funding new businesses and providing that extra boost of capital for market sustainability. What some people overlook, however, is that SBA loans can also be used for commercial real estate. Two SBA loan programs – the 7(a) and the 504 – both can be used for commercial real estate, but in very different capacities.

SBA 7(a) Loan Program

These SBA 7(a) loans are used by for-profit businesses for general financing, but they are also used for commercial real estate. Commercial real estate falling under the SBA 7(a) loan program runs the gamut from small retail storefronts, to child care facilities, and automotive repair shops. Additionally, SBA loans from the 7(a) program provide funding for the acquisition of commercial real estate in the hospitality industry, such as hotels and restaurants.

SBA 504 Loan Program

SBA 504 loans are flexible, and allow for all-purpose funding for commercial real estate, these SBA loans offer both variable and fixed interest rates on commercial mortgages, and can provide the majority of the financing needed for CRE acquisitions. SBA 504 loans are great for purchasing general facilities for those businesses which fall outside of the 7(a) programs.

Applying For SBA Loans

Because of the reliability and affordability, SBA loans are widely popular among entrepreneurs. However, the Small Business Administration is inundated with applications from SBA loans on a regular basis. In order to keep things from bottle-necking and grinding to a halt, the SBA uses certain commercial lenders to speed up the process. These “Preferred Financial Services” companies have the ability to all of the underwriting and approval in-house. This is much faster than using banks or other traditional lending institutes to process requests for SBA loans. Preferred Financial Services companies also have the ability to get the best terms and rates for entrepreneurs and commercial real estate developers.

Learn More

If you need SBA loans for commercial real estate, call Lavan Financial Group at 203-308-4547. We are proud to hold the designation of a Preferred Financial Services company, and can process your SBA loan requests quickly to keep your commercial real estate projects on track. Real out to us to day for a no-obligation analysis to see which financial solutions are available.