SBA Loan Options for Property Purchases

As a small business owner, securing the necessary funding to purchase property can be difficult. Many commercial financing options are unavailable due to your credit score, financial history or other business reasons. To keep your company moving forward and purchase the property you need, discover how which SBA loan offers you the best terms and other advantages today.

SBA 504 Loans

The Small Business Administration, or SBA, offers two key loan programs that provide you with the funding you need to purchase a property. The SBA 504 loan program is one of the most popular for purchasing real estate. This specialized small business loan targets businesses that need equipment, property or other assets.

SBA loans require more paperwork than conventional bank loans. Because they’re backed by the SBA, you’ll need to submit an application to the SBA and to the financial institution that’s distributing the loan.

Advantages of Choosing a 504 Loan

One of the main advantages of 504 loans is that they’re available for business owners who may otherwise not be approved for a commercial loan. The application process, while long, is typically more flexible in terms of down payment, credit score and other factors.

A 504 loan doesn’t use a balloon payment or short-term financing strategy but provides you with competitive interest rates, fixed monthly payments, and a generous repayment length.

SBA 7(a) Loans

Similar to the 504 programs, SBA 7(a) loans target small business owners who are struggling to receive the essential financing required to grow a business. The main difference between the 7(a) and 504 programs is that a 7(a) loan offers more flexible spending.

Instead of targeting the purchase of major assets, an SBA 7(a) loan can be used for operating expenses, renovations and other costs that may arise.

Benefits of Choosing a 7(a) Loan

Use your SBA 7(a) loan to purchase property, renovate your commercial building, pay for operating expenses or all three at once. The flexibility of this loan program makes it more popular for business owners than the 504 programs. However, depending on your commercial property and financial situation, a 504 loan may be a better fit.

Purchase Property With a Dynamic Option from the SBA

Search for the ideal SBA loan option for your business before you purchase a property. Don’t let low working capital, credit score or a short financial history prevent you from purchasing a property and growing your business. With the right SBA option, you can accelerate your business growth and enjoy reasonable payments on a major asset for your company.

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