Commercial Real Estate Loan Overview
Commercial Mortgage loans are made to companies for the purpose of acquiring and sometimes refinancing owner occupied commercial real estate through the SBA 504 and 7(a) programs.
Note: Real estate purchased for investment is not eligible for SBA financing.
Loan Purpose
- Purchase existing building
- Land acquisition and ground-up construction (can include soft cost development fees)
- Expansion of existing building
- Finance building improvements
- Furniture fixtures and equipment accompanying ground up construction or purchase of standing building
Loan Amounts
- $400,000 – $20,000,000
Rates
- 6.325% – Approximate SBA Debenture
- 5.25% – 10.25% – Current Bank Rates
Down Payment
- 10% Minimum
Amortization
- Up to 25 Years
Eligibility
Businesses seeking a SBA 504 or 7(a) loan must meet the following requirements:
- Must be for-profit.
- Must be located in and do business within the U.S.
- Cannot be a business that is considered ineligible for assistance by the SBA. A full list of ineligible businesses is available on the SBA website.
- Must have a satisfactory FICO SBSS score.
- 51% owner occupancy for existing building
- 60% owner occupancy for new construction
The most common method of funding commercial mortgage loans is through the Small Business Administration (SBA) 504 program.