SBA Loan Advantages

Not all SBA lenders look at SBA loan applications the same.  While one SBA lender may turn you down, another may approve the very same deal.  This is why it helps to submit your SBA loan to a dozen different SBA lenders.  When you are ready to submit your SBA loan request to our databank of over 100 SBA lenders, please click on the link.

SBA loans have a number of advantages:

• SBA lenders will often lend up to 90% loan-to-value on owner-user commercial buildings.  Banks making conventional commercial mortgage loans will seldom lend higher than 70% loan-to-value ratio, and during the Great Recession, many banks are limiting their conventional commercial mortgage loans to 58% to 65% LTV.
• SBA loans carry a government guarantee.  The interest rate is therefore often 50 basis points (1/2%) lower on SBA loans than conventional commercial mortgage loans.

• SBA loans enjoy a delicious 25-year term.  Most conventional commercial mortgage loans are limited ot a maximum of 10 years, and quite often a bank will only approve a 5-year commercial real estate loan.  This means that the borrower will have to pay for new points and new third party reports (appraisal report, toxic report, and title report) every 5 to 10 years.  This can get very, very expensive.  Even more importantly, you could have your conventional commercial mortgage loan balloon during a horrible recession.  This could be a disaster if all of the banks in town are too frightened to refinance your balloon payment.