Building Wealth & Business with SBA 504 & 7(a) Loans

SBA 504 Loan Program:

The is a federal initiative designed to encourage business owners to invest in commercial real estate for their operations. This program offers substantial benefits, making it easier for businesses to own, rather than lease, their commercial space.

Key Benefits of the SBA 504 Loan Program:

• Requires only a 10%-15% down payment, depending on whether you're a new or established business.

• Provides low, fixed interest rates for up to 25 years.

• Offers a favorable prepayment penalty structure.

• Allows business owners to lease up to 49% of the property’s usable square footage.

• Enables financing for tenant improvements, equipment, closing costs, attorney fees, and loan fees, maximizing leverage for the borrower.

• Borrow up to $5,000,000.

With these advantages, business owners can stabilize their real estate costs, build equity, and gain control of an appreciating asset. Owning commercial property also provides future flexibility, as the value of the building can be factored into the business’s exit strategy, whether through sale or retirement. In fact, owning commercial real estate is often a smarter financial move than purchasing a personal residence, as it creates long-term wealth and stability

SBA 7(a) Loan Program:

The SBA 7(a) Loan Program is another powerful tool for business owners, helping to fund key initiatives such as purchasing a business, acquiring commercial real estate, buying out a partner, upgrading equipment, increasing inventory, covering operational expenses, or refinancing debt.

What to Know About the SBA 7(a) Loan:

The SBA 7(a) program partners with banks and lenders to provide financing to more than 50,000 businesses annually. Contrary to popular belief, the government does not directly lend money for SBA loans. Instead, the SBA sets the guidelines and provides a guarantee, while banks and lending institutions supply the actual funds.

This SBA guarantee allows banks to offer favorable loan terms, including:

• Lower interest rates

• Minimal (or no) down payments

• Long repayment terms, ranging from 10 to 25 years

• Borrow up to $500,000

Ready to Start or Expand Your Business?

Let me help you find your next commercial real estate location. My turnkey service will guide you through securing your SBA 504 or 7(a) loan process.

John Bianchimano

RE/MAX CRE

Office: 215-698-2124

Cell: 215-778-8610

www.phillyandsuburbscre.com