FAQ - What Real Estate Loan Is Best For Small Businesses?

Didier Malagies • March 16, 2022

For small business owners, there are three main types of commercial real estate loans: conventional commercial loans, SBA 7(a) loans and SBA 504 loans.

The best commercial real estate loan for your business will depend on the specific type of financing you need and the property you intend to finance. Let's look at the pros and cons of each, to help you make the best decision for your needs.

Conventional Commercial Real Estate Loans

If you're looking for traditional financing for your real estate purchase, a conventional business loan is probably the best option for you.

Conventional commercial loans tend to be the most straight forward type of commercial loan. They are what you would expect-a commercial mortgage backed by commercial property. The lender is typically a bank, credit union, or other type of investment institution.

SBA 7(a) Loan Program

The U.S. Small Business Administration (SBA) offers an array of loan programs for very small businesses — those with fewer than 500 employees. The most popular is the SBA 7(a) loan program, which can be used for working capital, to buy equipment or to buy commercial real estate (among other things).

Two big advantages of this program are that it allows borrowers with lower credit and/or a low cash injection to qualify, and it's typically easier to obtain than other types of financing. However, it can take a lot longer to close an SBA loan than a conventional one, so plan ahead!

SBA 504 Loan Program

Other options under the SBA umbrella include the SBA 504 loan program, which is a common SBA loan and is your best option for fixed-rate and long-term financing for fixed assets such as buildings, facilities, and land.

504 Loans allow borrowers long-term, fixed rate financing of up to $5 million for fixed assets (land, buildings, facilities, machinery and more) that promote business growth and job creation.

504 loans are available through partnerships with the SBA and cannot be used for nonprofit, passive, or speculative activities.

For detailed information about each loan type, visit our commercial programs page.

For more information about what loan is best for you, talk to our commercial experts. Call (727) 784-5555. Or ask a question using the form below.

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Need working capital for your business?

By DDA Mortgage • July 5, 2022

If you need working capital for your business, you’ve come to the right place. We can get you up to $150,000 in financing in as little as 2 weeks. And unlike traditional banks and other lenders, we are here to help you throughout the process to make sure you get funded. Our program is designed to give businesses like yours access to cash when they need it most. The best part? There is no cash flow analysis, no debt refi, no equipment requirement - just working capital. You can get 30% of your top line, gross revenue from your last tax returns. To qualify for the loan you will need: To be self-employed for 2 years. Have a 680 FICO score or higher. Have a 155 biz score or higher. Access to working capital can help your business in many ways: Working capital loans can help with covering payroll. Some businesses have cash flow problems because they have to pay their employees before they get paid. This can be a problem for startups, especially if the business owner is also an employee. Working capital loans can help you cover payroll and other expenses until you receive payment from clients. Working capital loans can help with buying inventory. The cost of inventory is one of the biggest expenses for most businesses. Working capital loans can help you buy inventory quickly and easily so that you don't have to wait for your customers to pay their bills before they can receive it. Working capital loans can help with rent and building expenses. Rent and building expenses are ongoing costs that must be paid every month regardless of whether or not there have been any sales in that month. Working capital loans help businesses pay these bills on time so that they don't fall behind. There is no obligation to start the lending processes. Just an obligation to yourself to figure out what's best for you. Find out more about how much you can borrow to help you finance your working capital! Complete the form below and one of our advisors will reach out to you. Or, give us a call at (727) 784-5555 and we will be happy to answer all of your questions.