Using An SBA Loan To Make Business Improvements In Port Chester, New York

If you are a small business owner interested in purchasing commercial real estate for your company or looking for funding to help grow your business, there is an excellent lending option available to you. SBA loans are supported by the U.S. government and offer financing to help start or enhance a small business. If you are looking to make improvements to your business in Port Chester, New York, M1 Capital Corp is here to assist you. Read on to learn more about how SBA loans work and how they can benefit a business owner.

Understanding SBA Loans

SBA loans are backed by the United States Small Business Administration, which helps certain financial institutions provide borrowers business loans with great interest rates, flexible underwriting guidelines, and favorable terms. SBA loans can be used for a variety of purposes, including business operating costs, the purchase of commercial real estate, refinancing an existing loan to make renovations to an existing property, the purchase of equipment and machinery, etc. There are also many different types of SBA loans to suit almost any business need, including SBA 7(a) loans that offer a maximum loan amount of up to five million dollars, SBA 504 loans that also have a maximum loan amount of five million dollars and can be used to finance commercial real estate and equipment, and SBA Express loans, which offer quick processing and have a maximum loan amount of $500,000.

How Can I Use The Property I Obtain With An SBA Loan?

Both SBA 7(a) and SBA 504 loans can be used to purchase commercial property for a small business, however there are certain guidelines for the types of property that is purchased. Both of these loan types are intended to bankroll a property that will be occupied by the owner, which essentially means that the business needs to operate out of the purchased property. A borrower is not allowed to use the funds to purchase an investment property like a multi-unit apartment complex or single-family home. Most SBA loans do, however, state that the owner has to occupy fifty-one percent of the property, so a small business can rent out the rest of that property to other business owners.

What Are The Advantages And Drawbacks Of An SBA Loan?

As with any substantial financial investment, there are certain advantages and drawbacks to every SBA loan option, and you will want to work closely with your lender to fully understand the best option to suit your business needs. SBA loans offer many advantages including the option of a twenty-five year fixed rate for a commercial property that allows a borrower more time to pay off the loan. They also offer a loan-to-value of up to ninety percent, offering a borrower a great deal of leverage financially. Additionally, SBA funding can be used for a variety of purposes, such as business renovations, operating costs, and the purchase or construction of a new property. Some potential drawbacks include slower processing time, a possible down payment requirement, and strict lending requirements. If you are interested in an SBA loan in Port Chester, New York, contact M1 Capital Corp today.