An SBA 504 loan can be ideal for financing special purpose properties that can be difficult to finance conventionally
Many banks consider financing special purpose properties risky because such properties are constructed for specific, limited uses, which means a large capital investment may be required to convert special purpose properties to a more general use.
Using an SBA 504 loan to reduce a commercial lender’s exposure to this risk can result in a better package for financing special purpose properties. Other benefits of the SBA 504 loan for financing special purpose properties include:
- As low as 15% down keeps your cash working to grow your business
- Below-market FIXED interest rates with payments fully-amortized over 20 years, no balloon
- No limit on the total loan amount. Projects over $25 million can still qualify.
- Finance real estate purchase, construction (including land), expansion, renovation and equipment/furnishings
- No additional collateral required
- Businesses implementing energy efficiencies may qualify for additional financing
The specific types of property the SBA considers single purpose properties are listed here. While some conventional lenders consider restaurants to be special purpose properties, the SBA does not.