How to Purchase Real Estate Properties with an SBA Loan

When you want an SBA loan to purchase or improve on commercial buildings, then you should be looking at the SBA 504 loan. This type of loan can help you improve your building or aid you in purchasing machinery that will last you for at least 10 years. Of all the SBA loans, the 504 loan program has a specific design to allow small businesses to grow through buying a building.

After all, to buy a building may grow a business, and growing businesses feed the economy. If you want to know more about how to purchase real estate properties with an SBA loan, this will teach you how.

Low Down Payment

Small businesses may only have to put about 10 percent down. In some cases, there may be higher requirements. However, when you compare it to conventional loans, the down payment is a lot less. This allows you to save your money.

Long Repayment Term

As far as real estate loans are concerned, this one lasts for a long time. The 504 loan lasts for about 25 years. This allows you to make affordable monthly payments so that you can continue to focus on your cash flow.

No Balloon Payments

A balloon payment happens when you have to pay a large amount of money at the end of a loan’s term. When you have a 504 loan, this is never going to happen. Never worry about large sums of payment or having to refinance.

Below Market Interest Rate

You may be able to lock in a below market rate with the SBA 504 loan. The rate is less than 5.5 percent. In the current real estate climate, this should give you peace of mind. You don’t have to worry about your rates fluctuating depending on the lending condition. You know that you can focus on your business without having to worry about rising costs.

No Collateral Required

Unlike some loans, you won’t have to put any collateral down. The assets that you purchase with the loan are what you end up putting up as collateral. This makes it a less risky loan for most clients.

To buy new real estate can be one of the best decisions that you make for your business. Unfortunately, many small businesses do not have the finances to pay for real estate on their own. Most need to look into other forms of financing to make it work. This is where SBA loans come into play, particularly the SBA 504 loan.