Commercial Real Estate Loans

Blog by Jeff Rauth

Birmingham, Michigan

We discuss all aspect of commercial real estate loans. Check it out.

RealTown Blogs

Blogs Homepage

Featured Entries

SBA Commercial Loans are Still Viable!

Posted at Commercial Real Estate Loans by Jeff Rauth

Oct. 15, 2008

Tagged with: sba 7a loans, sba commercial loans

As the credit crisis looms and our media continues to bring us more and more bad news, I want to tell you first hand that SBA commercial loans are still closing! Borrowers call us now with an attitude of “I realize you can’t get it done, but just thought I’d call.” Nonsense, we are still closing commercial real estate loans and with some aggressive terms like 90% financing.

If you own or are considering buying a building for your business (meaning you’ll occupy it and not rent it out) than you have more options than you may realize. SBA Loans and Business and Industry loans top the lists. Both are government backed programs and both are still very much viable.

In fact, the government set these programs up, for the specific purpose of helping out borrowers that are having a difficult time getting convention loans. Also Uncle Sam set these programs up to help banks as well, by guaranteeing the loan balances in case of borrower default.

One of the major benefits for the SBA loans is the high level of financing. For example 90% loan to value financing is still very much an option for SBA commercial loans for purchases. 85% loan to value on refinances is still an option as well.

There are other benefits as well. For example, flexible (relative) underwriting standards. Keep in mind that the SBA does not dictate most of the rules. The funding bank does. So the key here is knowing which banks are really closing loans through the SBA. And what their individual guidelines are. For example we work with an SBA lender that works with borrowers that have 500 credit scores. We also work with a bank that offers 5 year fixed, ZERO $0 SBA fee loan.

If you call on 3 or so local banks and they all say no or drag their feet that doesn’t mean anything. Again you’ve got to know who the best sources are.

Another major benefit of the SBA commercial loans is that they can work with borrowers that are currently under water. I.e. meaning that they don’t currently cash flow. Basically they are able to use projections to offset the current loses. I can’t tell you how big of a point that is.

I say turn off the TV and put the paper down. Don’t just assume you won’t be able to get your commercial loan done. You may be surprised that not only will it fund but that you may have better terms than you expected.

Jeff Rauth is President of Commercial Finance Advisors, Inc out of Birmingham, Michigan a national commercial mortgage brokerage firm. 248 885-8797. He also has a STORE for commercial loan brokers. Contracts, spreadsheets, books, etc.

Permanent Link | Comments (0) | Write a Comment | Send Link