SBA Lender and special purpose properties

One of the largest SBA lenders offer advantages is the ability to work and fund special properties. In general, and in this current credit crisis mortgage loans secured by commercial real estate for special use is not the cake walk and many banks will not even look at these types of buildings.

Properties such as gas stations, motels or hotels, car washes, automotive repair facilities, restaurants, heavy industry, etc. are just some of the most common examples. The owners seeking loans from lenders can not wait SBA currently very conservative terms. 60% loan to value on purchases and 50% loan to value on refinances is the market.

Moreover, the terms of potential conventional loans are just as restrictive. 5 year fixed with 15 years depreciation is common with some exceptions in 20 years. The main problem with these shorter amortization periods is the effect it has on the cash flow of the borrower. The difference in monthly payments for a year 15 to 25 years is often higher than 30%. Couple this with the more conservative debt ratios and hedging demand that SBA lenders, and you have a problem of not meeting the minimum cash flow.

With SBA lenders use special owners can still expect 80% to 85% financing on purchases and whether the agreement qualifies for an SBA program, the seventh of a refinancing, 80% loan to value refinance is still very doable. Depreciation rates are often 25 years and over 504 program, borrowers can expect competitive rates on fixed long-term programs. 7 to 10 years fixed is still available, for example.

As these loans closed in this market, although simpler than the traditional is still difficult and a lot of common ailments about the SBA are still valid. One of the biggest expenses is the SBA fees are not cheap. For example, borrowers can expect 2% to 504 and 2.75% on the seventh program.

However, borrowers should keep in mind that all banks that fund SBA loans are different. Most restrictions are set by the lending banks and the SBA. For example, we work with a bank that usually pays the fees for SBA themselves so that borrowers do not enjoy a loan payment .......