SBA 504 Commercial Real Estate loan: Mistakes to Avoid

There are so many commercial real estate loans on the market it can be difficult to choose which one to pursue. As a commercial real estate loan company in Virginia, North Carolina, and Maryland, we have seen our fair share of mistakes. Allow us to help you take the next step forward with a pre-layed plan and the documentation you need to be approved. 

Top Commercial Real Estate Financing Mistakes to Avoid

There are a variety of mistakes that businesses and business owners make that are detrimental to their commercial real estate financing success. In many cases, these mistakes can be easily avoided with a little bit of planning and forethought. To ensure you have the best chance at being approved for a business loan, here are a few tips to follow.


Have A Business Plan

The best, and number one mistake we see businesses make is not having a business plan. Lenders want to see that the money you are applying for will go to good use and that they will see a return on their investment. It is for this reason that they will want to see a comprehensive business plan that demonstrates how this money would help your business. A detailed business plan will include financial statement, marketing strategies, future business goals, and expansion opportunities. In addition, the business plan should detail:


  • How much funding do you need.

  • What the funds will be used for.

  • How do you intend to repay the loan.

Bring Supporting Documentation

The overall financial well-being of your business will greatly influence the choice to approve your loan. That is why the supporting documentation you bring to the lender is imperative. Documents such as operating costs, earnings, expenses, profit, audited financial statements, profit and loss statements, balance sheets, cash flow statements, and corporate tax return documents. Most lenders will have a list of supporting documents the applicant will need to provide and failing to produce those documents can result in the rejection of your application. 

Shop Around 

Another mistake we see a lot of businesses make is not exploring all their loan options. Many businesses apply for traditional business loans and never look into other sources of financing. While a traditional business loan can be beneficial, it is often not the best solution for businesses. For example, if you are looking to purchase real estate, equipment, or finance a construction project, an SBA 504 loan may be a better option. The reason for this is because the SBA 504 commercial loan offers:


  • Up to 90% financing

  • Below-market, fixed interest rates

  • A low down payment

  • 10-25 year loan repayment terms

SBA 504 Commercial Loans in Virginia, North Carolina, and Maryland

When it comes to commercial real estate loans in Virginia, North Carolina, and Maryland, the SBA 504 loan is one of the best solutions available. At 504 Capital, we have successfully helped several businesses gather the information they need and be approved for this commercial loan. Let us help you next. 


Discover how a commercial real estate loan can help grow your business today! Contact us now at (757) 623-2691 or online.


Location: United States

Comments

Post a Comment

Popular posts from this blog

Everything You Need To Know About Construction Loans

Image
Construction projects are exciting, but also often require a significant investment of time and money. Fortunately, there are financing options available that can help you bring your project to life. One such option is the SBA 504 Construction Loan , which offers a variety of benefits for qualified borrowers. In this article, we'll take a closer look at SBA 504 construction loans in Maryland , including how they work, who qualifies, and the benefits of choosing this type of financing for your construction project. What Is An SBA 504 Construction Loan? An SBA 504 Construction Loan is a type of loan that is specifically designed to help small business owners finance the construction or renovation of commercial properties. These loans are made in partnership with private lenders and the Small Business Administration (SBA). In general, SBA 504 loans are structured to allow borrowers to obtain up to 90% of the total project costs, which can be used for a wide range of expenses includi...
Read more

FinTech Solutions for SBA 504 Small Business Financing

Image
S mall businesses often face challenges when it comes to securing financing for growth and expansion. Traditional financing methods can be cumbersome, time-consuming, and may not cater to the specific needs of these enterprises. In recent years, the landscape of small business financing has witnessed a transformative shift, thanks to the emergence of FinTech solutions. The Small Business Administration's (SBA) 504 loan program stands out as a crucial tool for businesses seeking to invest in commercial real estate. These loans, guaranteed by the SBA, provide a lifeline to enterprises looking to expand their physical presence. In this blog, we will explore the challenges associated with traditional financing, delve into the rise of FinTech in small business financing, and highlight how FinTech solutions are revolutionizing the SBA 504 financing landscape. Challenges in Traditional Financing Traditional financing methods often involve a complex web of paperwork, lengthy approval proc...
Read more

5 Ways To Get A Small Business Loan

So, you want to start a business? You have an idea for the perfect venture and are ready to take the plunge and invest in your future. Ambition is certainly an important piece of the puzzle, but now you need to figure out what’s next. To be successful, most potential business owners will need to secure a small business loan to help them with things like start-up costs, construction, or mortgage payments. Small Business Loans in A Few Easy Steps Ready to get started? Here are 5 ways to get a small business loan. 1. Research the type of small business loan you need If you are a new small business you will need a different type of financing than an established company interested in having additional money available for expansion.   Start-up companies can benefit from Small Business Administration (SBA) loans that are more forgiving when it comes to qualifications. Loans like the SBA 504 and 7(a) loans require less money down and have attractive repayment terms, including low, fixed-in...
Read more