Putting personal money into a business can help you overcome startup funding needs, but can also create unnecessary risk if done incorrectly. You need to make sure you properly account for the money on your business books so you accurately track the amount your business either owes you or how much ownership you have. Real Estate Business The boom in property sector is already showing in the high cost of cement, even property stocks on the exchange are smelling-hot. This emerging wealth is sure to simmer in to the hands of both the medium and small income earners. Do you have what it takes? First, you need to be honest with yourself. The truth is that not everyone.

How can I buy commercial property with no money down?

When it comes to business loans and real estate financing, the top five frequently asked questions business owners often ask are:

“Am I eligible for a commercial real estate loan?”
“How do I get a commercial real estate loan?”
“How much do you have to put down on a commercial loan?”
“What kind of loans are available for commercial property?
“How can I get a loan for a commercial property without money down?”

The answers may not only surprise you but may change your business forever.

What if I told you that the loan qualifications for a real estate loan are a lot easier than you think?

What if I told you that the minimum requirements for a business real estate loan are often less than those of the traditional banks?

What if I told you that they are a lot better than a hard money loan from a hard money lender?

What you’re about to read are perhaps the best-kept secrets about the SBA 7(a) Commercial Real Estate Loans.

Please read below for the secret ingredient many business owners need to acquire the commercial property to grow their business.

Can you get a commercial loan with no money down?

How about a low down payment?

You can get 100% financing at low interest rates, with no down payment required for the SBA 7(a) commercial real estate loans. You read that right!

That means possibly zero down payment!

What’s the catch?

You will need some form of assets or collateral to secure and qualify for this type of financing. These assets will stand instead of the down payment.

Business owners, are you currently renting your property?

If given a choice, would you prefer to build equity in your business every month or just be left with canceled rent checks?

Did you know there are non-bank business lenders who can pre-qualify you for a real estate loan?

Did you know they can do this literally in five minutes or less with no impact on your credit score and with desirable interest rates?

The question is whether or not it makes sense to keep your money by investing it in your business versus paying high, exorbitant rents?

Have you ever wondered how you can do that?

Very often, owning is less expensive than renting. By purchasing the property and instead of paying rent, you can build equity in your company, while decreasing your monthly payments.

The result is an increase in cash flow.
The additional cash flow then provides an opportunity to grow and expand your business.
The free cash can be in the form of other new hires, technology, inventory, or advertising.

Do you have a considerable rental expense?
Does it make sense to replace that rental payment with a commercial mortgage finance loan option?
Do I buy Commercial or do I Lease?

Here is the general rule of thumb.

If you plan on occupying the same space for at least seven years, the real estate purchase is usually less expensive than the rental.

Why?

The cost to purchase commercial real estate is much more expensive upfront versus your rental fees.

The bigger question is whether you have the purchase price funds to invest in the down payment for the mortgage without liquidating your net worth?

How much do you have to put down on a commercial loan?

THERE IS A 100% BUSINESS PROPERTY FINANCING SOLUTION!

Let me ask you a question.

Are you better off taking money to use as a down payment or investing that money in your business to grow and generate more annual revenue over time?

The answer is obvious.

What most business owners don’t know, and the banks won’t tell them, is that an SBA commercial real estate loan is affordable.

A $1 million SBA business real estate loan is just under $7,000 a month.

Compared to your monthly rent, that could be a steal!

Maybe you have a sizeable upcoming balloon payment with a bank loan? Perhaps you should consider refinancing your mortgage.

By refinancing, you might be able to improve your rate, term, or even your monthly payment.

What kind of loans are available for commercial property?

Types of Commercial Real Estate Loans

Can you tell me what the differences between an SBA 504 Loan and the SBA 7(a) Loan and loan amounts are?

The loan size is the first significant difference between the SBA 504 and the SBA7(a).

The SBA 504 has a minimum loan size of $125,000 and a maximum of $20M (or more).

The SBA 7(a) has a minimum of $50,000 and a maximum loan of $5 Million.

What Are Current Commercial Real Estate Loan Rates?

The loans offered through the Small Business Administration’s 504 and 7(a) have fixed rates and variable rates, respectively. (There are some fixed-rate options on the 7(a)).

The loan terms for the 504 are 20 years for real estate and ten years for an equipment loan with monthly repayment schedule.

These SBA options are far superior to either a revolving equity loan, equity LOC (line of credit), business lines of credit (LOC), or using business credit cards.

The SBA 7(a) loan is twenty-five years for a commercial property, and up to 10 years for business equipment and an acquisition.

The 7(a) loan offers 5 – 7 years for working capital, and a weighted average for mixed-use.

Here is the loan overview, application process, and what you need to know about the loan repayment and the SBA 7(a) Commercial Real Estate Loans.

These are 25 Year Fully Amortizing Term Loans
No Balloon Payments
Minimal Out of Pocket Expenses
Build Equity in Your Business

You are currently looking at variable rates.

These rates are approximately between 5.50% and 6.75% and spread (prime rate plus) between 1.5% to 2.75% (and are subject to change).

What are the general eligibility and credit requirements?

Here are the general requirements for the business owner for the property through the Small Business Administration.

FICO score 675 (no bad credit) Minimum
Good Credit History and strong financials
Cash Flow $1.15 debt service coverage – the debt service coverage ratio (DSCR) measures your available cash flow to pay your current debt obligations.
3 Yrs. Business Tax Returns
Bank checking accounts and saving accounts
Interim Balance Sheet
P&L
Net Operating Income
51% Owner-Occupied
Commercial Real Estate
Zoned for Commercial or Industrial
90% LTV Ratio
2 Plus Years in Business (established businesses only)
Personally Guaranteeing

You will not qualify if you are a developer or landlord.
If you are private investors looking for an investment property loan.
You do not occupy at least 51% of the property.

You will not qualify if you have a bankruptcy in the last three years.
There can be no foreclosures in the previous three years and no prior default on government-backed loans.
There can be no outstanding tax liens and no construction on an empty lot.
Lastly, there can be no building a new structure.
No investment properties or real estate investing.
No real estate flip projects for private real estate investors.

Business Putting Real Money