Purchasing commercial real estate can be overwhelming, not to mention expensive, especially for small businesses. Since it’s a sound investment, the SBA has designed a loan to help business owners purchase commercial property.
If you’re a small business in the CRE development space, can you qualify for an SBA loan for commercial property? And can you use that financing to purchase properties for further development?
The short answer is no, CRE developers do not qualify for an SBA commercial real estate loan.
Commercial real estate developers incur significant costs when preparing sites for construction. While their site development expenses are not eligible for SBA financing, the property once sold to a small business will qualify for an SBA loan.
Here’s what a CRE Developer can do:
- Sell a developed property to a small business that is eligible for an SBA loan
- Sell a commercial real estate plot to a small business prior to construction
By selling the CRE prior to construction, the financing provided by SBA to the business owner will bring down your costs at the construction stage, help you offset expenses, and see a project through to completion.
How We Can Help
If you are a commercial real estate developer, you can partner with BFC. With our knowledge and expertise, we can help you convert prospective business leads into deals.
- We support CRE developers by providing the right marketing tools to secure mortgage loans for interested buyers.
- We help buyers structure their loans through our loan program to increase their chances of approval. This gives them the purchasing power required to buy your buildings, pre and post-construction.
Advantages of an SBA Loan for Real Estate
You’ll agree that with mounting debt, taking up additional projects can