 How to Buy Commercial Real Estate with No Money Down and Grow Your Business
If you’re a business owner looking for a new space to operate, you might be wondering how to buy commercial real estate without breaking the bank. After all, purchasing a property is a big investment that requires a lot of upfront capital, right?
Well, not necessarily.Â
Thanks to SBA commercial real estate loans, you can buy owner-occupied commercial real estate with up to 100% financing and zero money down. That means you can get the benefits of owning your own property without draining your cash flow or taking on too much debt.
Sounds too good to be true? It’s not. In this article, we’ll explain how SBA commercial real estate loans work, what are the benefits of owning commercial real estate, and how you can get started today.
What are SBA Commercial Real Estate Loans?
SBA commercial real estate loans are loans backed by the Small Business Administration (SBA), a federal agency that supports small businesses. The SBA guarantees a portion of the loan, reducing the risk for lenders and making it easier for borrowers to qualify.
There are two types of SBA commercial real estate loans: 7a and 504. Both loans can be used to purchase owner-occupied commercial real estate, which means that at least 51% of the space must be used by your business. The main difference between them is the loan amount, interest rate, and down payment requirement.
- SBA 7a loans can go up to $10 million, have variable interest rates, and require no down payment.
- SBA 504 loans can also go up to $10 million, but have fixed interest rates, and require a 10% down payment.
Both loans have long repayment terms of up to 25 years, which means lower monthly payments and more cash flow for your business.
Benefits of Owning Commercial Real Estate
Owning commercial real estate can have many advantages for your business, such as:
- Building equity: As you pay off your loan, you build equity in your property, which can increase your net worth and provide financial security for the future.
- Appreciating value: Commercial real estate tends to appreciate over time, which means you can sell it for a profit or use it as collateral for other loans.
- Tax benefits: You can deduct mortgage interest, property taxes, and depreciation expenses from your taxable income, reducing your tax liability and saving money.
- Customizing space: You have the freedom to modify your space according to your business needs and preferences, without having to deal with landlords or lease agreements.
- Generating income: You can lease out the unused portion of your space to other tenants, creating an additional source of revenue for your business.
If you’re still not convinced that SBA commercial real estate loans are a great option for your business, then check out some anecdotal evidence and statistics that might change your mind.
The evidence:
George, a restaurant owner in Texas, used an SBA 504 loan to buy a building for his second location. He was able to get 100% financing with a low interest rate and a 25-year term. He says the loan helped him expand his business and increase his revenue.
Lisa, a dentist in California, used an SBA 7 (a) loan to purchase a dental office. She was able to get a loan amount of $1.5 million with a 10% down payment and a 10-year term. She says the loan allowed her to customize her space and save money on rent.
Richard, a manufacturer in Ohio, used an SBA 504 loan to buy land and equipment for his factory. He was able to get a loan amount of $4 million with a 15% down payment and a 20-year term. He says the loan helped him create jobs and improve his productivity.
Some Statistics:
- According to NerdWallet, the average interest rate for SBA 504 loans was 3.28% for the CDC portion and 4.75% for the bank portion as of December 20222.
- According to SBALenders.com, the average interest rate for SBA 7 (a) loans was 5.25% as of July 20233.
- According to Business.org, the average loan-to-value ratio for SBA real estate loans was 85% to 90% as of December 20224.
- According to Funding Circle, the average credit score requirement for SBA real estate loans was 640 as of May 20215.
- According to the SBA, the total gross approval amount of SBA real estate loans was $23.6 billion in fiscal year 20221.
- According to the SBA, the total number of approved SBA real estate loans was 28,462 in fiscal year 20221.
- According to the SBA, the total purchase amount of SBA real estate loans was $2.4 billion in fiscal year 20221.
- According to NerdWallet, the average loan amount for SBA 504 loans was $1.3 million as of December 20222.
- According to NerdWallet, the average loan amount for SBA 7 (a) loans was $420,000 as of December 20222.
As you can see, SBA real estate loans offer attractive terms and benefits for small-business owners who want to buy commercial property. If you’re interested in applying for one of these loans, contact us today and we’ll help you find the best option for your needs.
How to Get Started
If you’re ready to buy commercial real estate with no money down and grow your business, here’s what you need to do:
Answer a few simple questions: Click here to fill out a short form and check your eligibility for SBA commercial real estate loans.
Connect with a loan specialist: We’ll match you with a trusted and experienced loan specialist who will help you find the best option for your business. We have over 100 lending partners who offer competitive rates and terms.
Apply for the loan: Your loan specialist will guide you through the application process, which involves providing some financial documents and information about your business and the property you want to buy.
Get funded: Once your loan is approved, you’ll receive the funds in your account and be ready to close the deal on your new property.
As you can see, SBA real estate loans are a great option for small-business owners who want to buy commercial property.Â
They offer long repayment terms, competitive interest rates, and up to 100% financing. Plus, they come with many benefits, such as building equity, appreciating value, tax benefits, customizing space, and generating income.
If you’re ready to take advantage of this opportunity and take your business to the next level, don’t wait any longer.Â
Apply for an SBA real estate loan today and get the capital you need to grow your business.Â
It’s easy, fast, and secure.Â
Just fill out a short form, connect with a loan specialist, and get funded. Don’t miss this chance to buy commercial real estate with no money down and achieve your business goals. Apply now and get started on your journey to success.
Spartan Coaching & Consulting helps small businesses and entrepreneurs achieve their goals and grow their revenue. We offer services including SBA expedited funding, business credit builder, and coaching and consulting.
Spartan is a leader in the industry because we have a team of experts with over 20 years of experience, and have access to over 250 lenders and funding sources.
Whether you need capital, credit, or guidance, Spartan Coaching & Consulting can help you take your business to the next level.
