COVID-19 SPURS SBA LOANS FOR ENTREPRENEURS

Entrepeneurs

For many, the best way out of the problems caused by the COVID-19 Recession is to create their own job by embracing their entrepreneurial spirit. We were stunned to find out just how affordable user/owner real estate is right now. The SBA (Small Business Administration) 504 Loan option allows businesses to put only 10% down..preserving precious capital for labor, wares, utilities, etc.

Conventional Loan Advantage:
Buying a $1,200,000 building with conventional financing would require a 20% downpayment ($240,000) with the balance being financed with 4.5% interest on the balance, amortized over 25 years. Monthly payments for principal and interest would be $5,336/month. Advantage: Fantastic affordability due to low-interest rates.

SBA 504 Loan Advantage:
Doing the same deal with a 504 SBA Loan would require a 10% downpayment ($120,000) with 50% of the purchase price being financed by a conventional lender at 4.5% interest, and 40% of the total being an SBA Loan at 2.6% interest. The combined principal and interest would be $5,513/month. Advantage: for only an additional $177/month…this option would cut the downpayment in half.  That $120,000 downpayment reduction will be welcome as our business grows and we need our cash reserves.

A Picture is Worth…
To demonstrate the above example, I’ve included a graphic provided by Eric Bergeson, Vice President of Key Bank. He is a Senior SBA Specialist, and a great resource for financing owner/user real estate…and more. He’s available at (503)353-2126.

SBA Graphic-Key Bank

If you want to be a genius in 5 years, make wise commercial real estate investments now. If you want a valued resource to help you reach your goals…contact Rose City Commercial Real Estate: (503)577-1034, or rick@rosecitycre.com.

Notes:

  1. Rose City Commercial Real Estate recommends resources based solely on: A.) Their reputation amongst industry pros, and/or B.) Our personal experiences. etc.
  2. There is no common ownership between Rose City Commercial Real Estate and recommended resources.
  3. We do not request, nor do we accept referral fees from recommended lenders, inspectors, management companies, and other related resources. That way you know there is no conflict of interest.

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