Where is the money?

Where is the money?

That’s what many business owners are asking us these days. A large part of our clientele are business owners looking to purchase commercial real estate to house their businesses. These are mostly small business owners who are leasing their current business location and want the benefits of ownership. After all, why pay rent when you can use that money to pay for a building and build equity! Although ownership may not be the right option for every business, such as one that is growing quickly and needs flexibility, for many businesses it has some great long term benefits.

But with today's more stringent lending requirements, when most lenders are now requiring 25% to 35% cash down payments, where do these small business owners get financing for the purchase of a building?

The answer is U.S. Small Business Administration (SBA) loans! The SBA offers numerous loan programs to assist small businesses, with the SBA acting as a guarantor for these loans.

With financing rather easy to come by in the last few years, SBA loans were almost forgotten by many seeking financing. Buyers did not want to hassle with the extra red tape and paperwork of an SBA loan. But with the days of easy financing behind us, SBA loans are looking better than ever.

By requiring a down payment of only 10%, SBA loans are fast becoming an attractive financing option. Additionally, as a part of the US government stimulus package, I am told that the normal SBA loan fee is going to be waived for the next eighteen months, making an SBA loan an even smarter option.

The beauty of SBA loans is that they can also be used for most sound business purposes, including building improvements and fixtures. The SBA loan process has been streamlined over the years and, unlike in the past, it now can be cost effective down to a loan amount of $200,000.

If you need more information on the benefits of building ownership or SBA financing give us a call!

Wishing you the greatest success with your business in 2009!

Jeff K Johnson

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