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Buy or Lease? The SBA Option - By Ken Mannina  |
Why do so many small business owners elect to purchase their own building rather than lease space? There are several reasons, including the control of occupancy costs, stability of the business operation, and...of course...tax benefits. However, the most compelling reason to buy rather than lease is often the attractive financing terms offered by the U.S. Small Business Administration (SBA).
When using the SBA option to purchase owner-occupied commercial real estate, business owners can buy a building with as little as 10% down - up to 90% loan to value. This compares quite favorably with conventional commercial real estate financing where a down payment of 30% is usually required. Small business owners appreciate the leverage provided by the SBA program because the low down payment enables them to conserve cash in order to support business growth.
SBA loans offer fixed and variable rate programs with up to 25-year terms. And, all loans are fully amortizing which means no balloon payments. SBA financing is available for a variety of property types including office, retail, industrial, and even converted SFR and commercial condominium properties. With a SBA loan, borrowers often include financing to assist with improvements, or they can purchase land and finance the ground-up construction of their own building.
Contact us to find out more about the SBA loan programs offered by Bridge Bank.
Ken Mannina is Senior Vice President of SBA Lending at Bridge Bank.
To contact Ken directly, call 408.556.8336 or by e-mail to
ken.mannina@bridgebank.com
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| Back to Business as Usual -
By Ralph Barnett |
The Continuing Budget Resolution that went into effect October 1, 2002, capping the amount on 7(a) SBA loans to $500,000, has been lifted. Limits are back up to $2,000,000!
On February 25, 2003, President Bush signed a bill that increased the
SBA Loan Budget by 130%! This increase to the budget allowed the SBA
to restore the 7(a) loan limit back to the prior maximum amount of
$2,000,000, effective immediately.
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During the period the cap was in place, Bridge Bank actively worked with applicants to find solutions to closing on their projects. One of the best solutions included using the Bridge Bank Hybrid Loan Program. This structure joins an SBA loan with a non-SBA loan and allowed us to continue closing on projects up to $1,700,000. Now that the cap is removed, we can get back to business as usual by assisting applicants on projects up to $4,000,000.
Contact us to find out more about the SBA loan programs offered by Bridge Bank.
Ralph Barnett is Executive Vice President of SBA Lending at Bridge Bank. To contact Ralph directly, call 408.556.8334 or by e-mail to ralph.barnett@bridgebank.com.
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