If you are a commercial real estate investor you may want to skip this article. If you own your own business, however, this is for you. It’s the Small Business Administration’s (SBA) loan program.

Scott Glenn

Scott Glenn

Specifically targeted toward helping startup and small businesses grow, the SBA provides alternative financing that allows business owners to purchase fixed assets like equipment or real estate or construct a new building.

Conventional financing options often require a 30 percent to 50 percent down payment. These large upfront costs can prove to be financially draining on a small business, especially during the current economic downturn. However, the SBA offers financing options with as little as 10 percent down and fully amortized terms between 20 and 25 years.

Also, as a part of the American Recovery & Reinvestment Act, all SBA loan fees have recently been severely reduced and in some cases entirely eliminated. Loans granted by the SBA are issued at a standard fixed rate and are always backed by a 100-percent SBA guaranty.

Almost any type of legitimate small business is eligible for SBA financing. When purchasing a building or land with an SBA loan, the business is required to occupy at least 51 percent of the property. These fixed-rate loans give small businesses the opportunity to grow into a building that fits their needs while putting the least amount of strain on their financials.

If you are a small business owner looking for real estate financing, make sure you work with a preferred lender as a part of the SBA’s Preferred Lender Program. Your lender should be knowledgeable with the SBA process as well as understanding your business needs.

When it comes to commercial real estate as a way to meet your long-term goals, take advantage of the favorable terms offered by SBA financing. It might just be what you need to help your company grow while maintaining lower costs.

Click here for more information on financing options or to visit all of Radius’ available properties.

— Scott Glenn is a Radius Group Commercial Real Estate partner.