The Real Estate and Business Blog

This past week, one of my clients successfully closed on an SBA guaranteed loan for the purchase of real estate intended for his business.  Although a bit more expensive to close and, at times, stressful for the borrower to gain approval, the benefits were  plentiful.

Primarily, real estate SBA loans allow business owners to maintain liquidity and working capital by providing for low down payments and low monthly payments with flexible terms.  The SBA also provides cash loans and equipment loans – seven years and up to fifteen years, respectively

It was announced that as of  February 22, 2010, the SBA had reactivated Recovery Act loan applications through its queue system.   Their queue system provides options to lenders and small business borrowers when the funds under the Act for fee relief and higher guarantees have been exhausted, by allowing funding from cancellations of other loan applications or Congress comes through with more money to fund the program.

The Act eliminates the upfront guarantee fee for loans with maturities greater than one year depending on fund availablity.  Under the Act, however, higher SBA guarantees for lenders under the 7(a) program expired.

The US Small Business Administration, however, has indicated that the end of the acceptance of applications under the queue programs draws near.  Small business owners should take advantage of these programs while they last.  For more information, contact your banker or visit the US Small Business Administration website for more information on this program.