SomerCor Partners with Commercial Real Estate Professionals on SBA 504 Lending
SomerCor is a valued resource for commercial real estate professionals to help their small business clients buy, build, expand or refinance owner-occupied commercial real estate through the SBA 504 loan program.
Credit tightens during times of economic uncertainty, making it harder for commercial real estate clients to buy or sell their property. The SBA 504 program is a proven financing option with borrower-friendly benefits to make accessing capital more affordable.
Reduce Your Monthly Payments
For a borrower looking to purchase a building, the final loan structure includes a third party lender (typically a bank) providing 50% of the financing, a certified development company (like SomerCor) providing up to 40% of the financing, and the applicant putting down as little as 10% of the financing. These borrower-friendly terms provide a pathway to property ownership and growth:
- Low down payment – up to 90% financing for established businesses
- Competitive interest rates – lower and more affordable monthly payments, freeing up capital to reinvest in the business
- Long-term rates 10, 20, or 25 year fixed – no surprise balloon payments
Flexibility to Personalize and Renovate
Building ownership is just the start of the SBA 504 loan. Borrowers can make critical building enhancements and modifications to expand the reach of operations, meet new safety protocols, and create a state of the art facility. 504 loans funds can be used for:
- Expansion, construction, and renovation of a new or existing facility – personalized for optimum customer service, efficiency, and the flexibility to grow
- New equipment purchases to expand capacity and streamline operations (as part of a real estate transaction)
- Upgrades and modernizations to reduce energy use or offset that consumption through renewable energy
As with all SBA 504 real estate purchases, the business must occupy at least 51 percent of the building purchased. If the financing is for the construction of a new building, the business must occupy 60 percent of the building.
Leverage Equity for Cash Out
For those business owners who already own commercial real estate, the SBA 504 refinance program may be a great option to save and improve cash flow.
In addition to the lower monthly payments, fixed 20 or 25 year low interest rate, and payment predictability of the 504 loan, refi clients can take cash out for eligible expenses. Eligible expenses for cash out funds include:
- Salaries (non-owners)
- Rent
- Utilities
- Inventory
- Business line of credit and business credit card debts
Download the program flyer and connect with a member of SomerCor’s loan origination team to learn more about how the SBA 504 loan program supports commercial real estate financing.
