Buying commercial real estate is an exciting time for a business owner, but it can be an intimidating process. Acquiring tangible assets, whether an existing property, new construction, or a redevelopment project, requires a lot of financing.
When the time comes to acquire commercial real estate, an SBA commercial real estate loan can be a great way to obtain property for your business.
Here are some things to consider when acquiring commercial real estate:
1. Make sure you qualify
In order to apply for an SBA commercial real estate loan, you must meet certain eligibility criteria such as running a for-profit business and having a physical location within the United States. There is also a requirement for at least 51% owner occupancy for existing buildings and 60% owner occupancy for new construction. If you’re not sure whether you qualify, talk to one of our Business Development Officers who can help determine if an SBA loan is the right route for you.
2. Choose an SBA program
The SBA offers two loans that can be used for commercial real estate purposes – the SBA 504 loan and the SBA 7(a) loan. There are some key differences between the two programs that you’ll want to consider before applying. Again, the best thing to do is to speak with a Business Development Officer who can review your specific business needs and advise you on the best options.
3. Prepare for the application process
Applying for a commercial real estate loan can be an arduous process, but there is some prep work you can do to make things easier on yourself and the lender. Gathering commonly required information in advance can help the process go much smoother! Some things you’ll likely need include: business tax returns, financial reports, bank statements, personal tax returns, and personal financial statements.
Whether you’re ready to start the application process or you still have some initial questions, the SBA lending team at FNB Small Business Finance is here to help. As experienced commercial real estate lenders, we understand all types of businesses and their differing needs. We can help you navigate the SBA loan process to tailor a creative, cost-effective loan for your commercial property.