REAL ESTATE TIP OF THE WEEK: SBA 504 LOANS

SBA 504 loans are now available with a 35-year-amortization.  Previously, these small business financing tools offered 10-year and 20-year amortization schedules.  This longer amortization will reduce monthly payments and help small businesses manage cash flow.

The SBA 504 program has long been a staple of real estate finance due to its lower 10% borrower equity requirement.  The loan structured is 10% equity from the borrower, 50% from a bank, and 40% from the SBA.  The SBA portion is funded by issuance of a 10-year or 20-year debenture, now also a 25-year debenture, with fixed rates.  Bank interest rates typically fluctuate based on credit quality and term.

The longer 25-year amortization has been in demand for many years, and, finally, the SBA has delivered.  Industry experts believe this will become the most popular answer for real estate financing.  Talk to your banker or call us for more information.

For more information contact: (952) 854-8290

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