SBA 504 Loan Benefits
There are lots of reasons for small business owners to choose the SBA 504 loan. Below, you can read the nine most important benefits of this type of financing. Select “Learn More” at the bottom to see the full list and learn exactly why this is the Best-Kept-Secret in Commercial Property Financing.
- Ninety-percent (90%) Loan-to-Cost FinancingWe can provide up to ninety-percent (90%) financing of the total project cost, which includes the land, construction/renovations, soft costs and closing costs. Ordinary commercial loans require two to three times the equity (20-30% down), so it’s easy to see how a small business owner can preserve more capital and use it to grow the business in other ways with the SBA 504 loan.
- Long-Term, Below-Market, Fixed Interest RatesThere are very few cases where variable interest rates make sense when it comes to small business commercial property financing. The ability to get long-term (up to 25 years), below-market, fixed interest rates makes it possible for business owners to save on interest expenses.
- Longer Loan AmortizationsLonger loan amortizations allow for smaller monthly payments, which have less impact on business cash flow. Prepayments are allowed, if that’s preferred, so our loans give flexibility. Remember, though, that it’s not smart to sink too much capital into a non-income-producing asset like commercial property. There are better ways to use that money and grow the business.
- No Balloon Payments, Calls or Covenants
These are often features of ordinary commercial loans that protect the lender, and they are definitely not in the best interests of small business owners. 504 loans give business owners more control, more peace-of-mind, and less lender micro-management (something nobody likes).
- Close within 30 Days
Because we specialize in this type of financing, we’re extremely efficient at it. And we flat-out hustle. We want to get each of our Clients to the closing table so they can start enjoying the benefits of commercial property ownership as soon as possible. We despise dilly-dallying and hope you do, too.
- Specialists Make the Process Simple
To be completely honest, the type of financing we do is complicated, and that’s why few lenders will recommend a 504 loan. But this is all we do, and we do it really well. Working with a specialist like us makes everything simpler for our small business Clients.
- Assumable Loans
SBA 504 loans are always assumable. If another person or business were to purchase a property we’ve previously financed, they would get the benefit of the below-market, fixed interest rates that came with the original loan. If it becomes necessary to sell a property down the road, this is a great feature.
- No Disruption of Existing Banking Relationships
Because of our specialization — again, we only finance commercial property for small business owners — there’s no need to worry about changing any of your existing banking relationships. We keep it simple for the small business owners we work with.
- It’s the Overall Best Deal for You
As you can see, the SBA 504 loan offers many advantages that just aren’t possible with ordinary commercial loans. Small business owners who are serious about owning commercial property to grow their businesses and plan for retirement should seriously consider this type of specialized financing. After all, it was designed specifically for this purpose!