In this episode, we talk about putting together a loan request summary and best practices while shopping for loans for your development projects.
In this episode, we discuss financing build-to-rent properties with bank and PACE Equity financing. This is a great way to get higher leverage and better ROI for developers.
Check out this episode today.
Two types of SBA loans: 504 and 7a
Though CDC/504 loans tend to be conflated with real estate, they are really designed for anything that you log under “property, plant, and equipment.” This means you can use them for purchasing or renovating commercial real estate or for purchasing equipment.
These are some eligible uses for SBA 504 loans:
The purchase of existing buildings
The purchase of land and land improvements, including grading, street improvements, utilities, parking lots and landscaping
The construction of new facilities or modernizing, renovating, or converting existing facilities
The refinancing of debt in connection with an expansion of the business through new or renovated facilities
The purchase or upgrade of equipment and machinery
You can’t use an SBA CDC/504 loan to refinance pre-existing debt or for working capital, so if you’re looking for a more versatile loan, then consider the SBA 7(a) loan program.
While you can choose to earmark funds toward purchasing land or buildings, you can also use a 7(a) loan for business renovations, building out a leased property, capital expenditures like meeting payroll expenses, and to help with everyday operating costs.
The funds from an SBA 7(a) loan can be put toward any of the following uses:
Expand, acquire, or start a business
Purchase or construct real estate
Refinance existing business debt
Provide working capital
Construct leasehold improvements
Dylan is a principal of The Requity Group, a real estate investment company focused around the acquisition and operation of mobile home parks, and multifamily real estate.
He has been a principal on over $50M in real estate transactions over the last 4 years.
Trying to decide what type of loan is best for your business can be confusing.
With all the rules, guidelines, and regulations, it’s easy to get overwhelmed.
But with the right information, you can confidently choose the best loan program for your specific business needs.
An SBA 504 loan is commercial real estate financing for owner-occupied properties. These loans require only a 10 percent down payment by the small business owner and funding amounts range from $125,000 to $20 million and sometimes more. The SBA piece can go up to 5.5 million and the senior loan can be upwards of 20 million. There are a lot of ways to structure these loans
On the other hand, SBA 7a loans can be used to buy a business or obtain working capital. The maximum loan for an SBA 7a loan amount is $5 million.
To schedule a call or for more information please visit https://sbaexchange.com/
In this episode we cover the basics on getting small multifamily loans under 1 million loan amounts funded. Trying to find funding for smaller apartment loan purchases can be extremely difficult because many banks don’t like to make loans under a million. We have seen an influx of requests so we decided to address the basics in this video. We talk about bridge to bank financing and some tips to getting your loan request approved.