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Small Business Loans for Real Estate Agents — SBA7a.Loans

In 2017, over 6 million homes were sold across the United States, and nearly 90% of sellers used a real estate agent to help them through the process. Right now, there are over 2 million Americans with active real estate licenses, and over 1.3 million members of the National Association of Realtors (NAR). So, while the housing market may be hot, there’s a ton of competition to contend with. And, if you’re a real estate agent or realtor looking to get an edge over the competition, getting an SBA loan could be great way to do so.

SBA 7(a) Loans for Real Estate Agents

Many real estate agents may find that the SBA 7(a) program, the Small Business Administration’s most commonly used loan program, is the best fit for their needs. This is because 7(a) loans can be are incredibly flexible, and can used for working capital, equipment, and owner-occupied commercial real estate. SBA 7(a) loans for working capital and equipment have terms of up to 10 years, while SBA 7(a) loans for commercial real estate loans have terms of up to 25 years.

Real estate agents can use SBA 7(a) loans for:

  • Buying or maintaining a vehicle: Since real estate agents usually need to travel on a daily basis to meet with clients and show properties, an SBA 7(a) loan can be a great way to fund the purchase or repair of a business vehicle.

  • Refinancing business debt: If you’ve taken out a small business loan to fund your business, and the debt is currently on unreasonable terms (i.e. abnormally high interest rates or fees), you may be able to use an SBA 7(a) loan to refinance it.

  • Expanding a real estate brokerage:  If you need to hire new employees or expand your marketing efforts, SBA 7(a) loans are a great choice.

The SBA 7(a) loan is often the best type of SBA financing for independent real estate agents and small to mid-size brokerages. However, if you run a larger brokerage that wants to use an SBA loan to purchase (or even build) a new headquarters, an SBA 504 loan could be a superior option. SBA 504 loans are intended for the purchase and construction of owner-occupied commercial real estate, not working capital, and are typically offered at much lower interest rates than 7(a) loans.

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