SBA Commercial Loan

An SBA commercial loan should be your choice of financing when you are buying the real estate in which you've operated an established successful business or...

When you are purchasing a business or starting a new one.

Either way, utilizing these SBA owner-user loans may the best way to finance your purchase.

An SBA commercial loan is slightly more complicated to work with than conventional financing and very few borrowers understand how it works.

Basically, SBA financing is for the owner user. In other words, for the business person who intends to occupy the majority of the space in the property. Fifty one(51%) or better is acceptable

Here are a few property types using the SBA loan;

Owner User Manufacturing

Owner User Studio

Distribution Warehouse

Owner User Fast Food

Here at Cal Commercial Advisors, we deal with 2 types of SBA loans. They are, the SBA 504 and the SBA 7a.

The 504 loan...

  • You pay on 2 mortgages
  • It is comprised of a 1st & 2nd trust deed
  • They both have a fixed interest rate
  • It is used for the purchase of the property for the business
  • The real estate is collateralized

The SBA 504 is by far the most popular among the two because it is a fixed interest rate product.

The 7a loan...

  • You pay one mortgage
  • It is an adjustable loan
  • Used when purchasing the business, equipment, inventory
  • Lender files a "blanket lien" on borrower's personal residence, equipment and inventory
The 7a is basically an adjustable loan product and therefore is less often utilized...unless the interest rate is lower than the fixed rate and the borrower has no objections to the floating interest rate.

The beauty of the SBA commercial loan is that your down payment into your purchase transaction can be as low as ten percent (10%) down.

Conditions of borrower...
  • Borrower must be financially healthy/stable
  • Credit needs to be from good to excellent
  • Positive cash flow is required from borrower to ensure adequate debt coverage
  • Aside from mortgage and debts, borrower needs to have adequate income to live on

Documentation required in order to pre-qualify a borrower for SBA financing are the following;

  • 3 yrs personal & business tax returns (federal only)
  • Current personal financial statement
  • Business debt schedule or balance sheet
  • Interim financial statements

"CLICK HERE" 504 SBA commercial loan structure

"CLICK HERE" 7a SBA commercial loan structure

If you aren't sure which SBA loan is a fit for your particular situation, don't worry...we'll figure it out for you.

We can analyze your transaction and get you pre-qualified with one of our preferred SBA lenders.

Please Complete The Form Below And Submit

Please note that all fields followed by an asterisk must be filled in.

Please enter the word that you see below.