Small Business Lending Tip: SBA Loans Through Eligible Passive Companies

Did you know? Small business financing can be used for property not owned by the small business.

Whether you’re a new small business owner or a seasoned ‘veteran’, a certified lender can help you make SBA financing work for your commercial real estate arrangement. There are many reasons for a small business to avoid real estate ownership including tax breaks, legal advantages, or the use of outside capital.

In the case of a recent client, a separate small business can be formed to purchase commercial real estate to be leased to the business. This sort of situation is made possible through the formation of an eligible passive company, which is a separate entity that mirrors the ownership of the operating company. While the U.S. Small Business Administration does allow this process to work, there are several requirements that the eligible passive company must adhere to, so make sure to meet with a lending professional to learn more. 

About Bruce Hurta

Bruce Hurta is an SBA real estate loan expert, lender, and public speaker committed to helping small business owners achieve affordable financing to build and grow their business. As an SBA loan expert, Bruce helps Houston business owners finance owner-user commercial real estate with the SBA 504 loans and SBA 7(a) loans. He also works with business owners looking to buy, build or grow a business. Using the flexible terms of the SBA 7(a) loan program, Bruce can help business owners purchase an established business or franchise, finance start-up costs or fund expansion of an existing business. With 20 years of SBA loan experience, Bruce is the trusted expert in Houston small business loans and SBA financing. He was the 2013 president of the Houston Association of Government Guaranteed Lenders (HAGGL), the official trade organization for over 300 SBA lenders in the Houston 32-county SBA district, and maintains an active role in the organization today.

For SBA 7(a) or SBA 504 loan information, business finance tips and small businesses resources, contact Bruce at 281/384-2595.   Meet Bruce face to face at one of his many speaking engagements across Houston, where he teaches on how to use SBA 504 loans for commercial property financing, and other small business lending topics.

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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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One Response to Small Business Lending Tip: SBA Loans Through Eligible Passive Companies

  1. Bobby Saint says:

    I never realized that it is possible for small businesses to purchase a real estate through business financing. It is indeed recommended, like you said, to hire a business lender to provide you with expert advice on how to go through with the processing of this type of business loan. This way, you would be informed of the actual obligations you need to meet and see if it is indeed practical for your own small company. If I were to apply for a small business loan myself, I would definitely take this into consideration. Thanks.

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