Small Business Lending Tip: How to Finance an SBA Loan with Only 10% Down

You may already know that SBA loans provide many distinct financial benefits for small businesses. One substantial advantage of SBA financing its ability to ease the overwhelming and expensive process of purchasing commercial real estate. Buying commercial property can be the biggest sound investment for your company and the biggest cost. And it can be the most complex undertaking for any type of business. With most other types of loans, borrowers often get stuck paying 20-30% down, but with an SBA loan, a minimum of only 10% down payment is required. A small business can take advantage of this benefit in three ways:

1. Proven Business History

In this situation, the 10% down payment is given as a reward for overall business stability. A history of business management experience and a steady cash flow are a few of the characteristics of these strong applications.

2. Business Assets

If a borrower is still building the strength of his or her business’ track record, he or she can offer additional collateral in the form of business assets.

3. SBA Allowance

The seller can elect to carry a 2nd lein on the property that they are selling to the small business owner. This means less negotiation time and a quicker sale.

 

 

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About Bruce Hurta

Bruce Hurta has extensive experience in Small Business Lending. He has served in a number of commercial lending and banking capacities in his career including, President of a Houston-area community bank for 6 years, managed Independence Funding Company, a non-bank start-up in 1994, where he developed his SBA lending expertise. Bruce spent 4 years in Finance as a bank examiner for the Texas Banking Department, 7 years in executive management at two community banks, and 14 years as SBA Lender. He is active in the commercial realtor and business brokerage communities, along with various business and industry organizations. Bruce Hurta is Vice President - Business Development in Houston, TX for Fidelity Bank SBA Lending nationwide. Fidelity Bank offers SBA 7(a) loans, SBA 504 loans, and USDA loans for small businesses to purchase or construct new buildings for their small business operations, to acquire a business, to expand a business or to buy out a business partner.
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