Helping small businesses become even more successful.
The Small Business Administration (SBA) has three loan programs for the purchase, refinance or construction of commercial real estate.
7(a) Real Estate
|
504 Loan Program
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7(a) Pari Passu
| |
|---|---|---|---|
Use of Funds
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Owner-occupied commercial real estate purchase, refinance or construction
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To purchase or construct owner-occupied commercial real estate
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Owner-occupied commercial real estate purchase, refinance or construction
|
Industries
|
Most industries qualify; no nonprofits
|
Most industries qualify; no nonprofits
|
Most industries qualify; no nonprofits
|
Loan Types
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Term loans
|
Term loans
|
Term loans
|
Loan Amount
|
Up to $5 million
|
Up to $11.25 million for most industries; higher for qualified manufacturing firms
|
Up to $7 million;
First loan: Up to $5 million SBA guaranteed; Second loan: Up to $2 million U.S. Bank direct |
Interest Rate
|
Based on LIBOR and WSJ Prime
|
Based on LIBOR and WSJ Prime
|
Based on LIBOR and WSJ Prime
|
Term
|
Up to 25 years
|
Lender loan (real estate): Typically 25 years; CDC Loan: Typically 20 years; Equipment loan: 10 years
|
Up to 25 years
|
Amortization
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Fully amortized;
no balloon payments |
Typically 25 years on first position; 20 years on the long-term (CDC) portion
|
Fully amortized;
no balloon payments |
Prepayment Penalty
|
5% – first year
3% – second year 1% – third year |
Prepayment applies
|
5% – first year
3% – second year 1% – third year (For second loan, prepayment applies) |
Collateral
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Subject to property; additional collateral may be required
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U.S. Bank loan: First mortgage on property being financed;
CDC loan: second mortgage on business real estate |
Subject to property; additional collateral may be required
|
LTV/Advance Rates
|
LTV up to 90%
|
LTV up to 90%
|
LTV up to 90%
|
