10%, that’s all.
Ten percent down is the minimum required down payment for most borrowers with the SBA 504 program. The 504 is an excellent commercial real estate loan program because it provides great leverage and the SBA guarantee provides the lender with security.
Could you be required to put down more? Yes, but 10% is possible for many businesses.
Start-Ups and “single use” properties typically require an extra 5% and a start-up that operates out of a single use facility like a car wash, a hotel, a mini warehouse, etc. will typically require 20%.
Ten percent is also the amount you need to cut your energy consumption to qualify for the SBA’s energy efficient green loan for commercial real estate – including loans upwards of $12 million. The green loan allows you to use (and re-use) your SBA eligibility over and over. Think of it as a rewards program for those going green, because if your project meets the SBA’s energy efficient guidelines then you do not run out of eligibility.
If you are purchasing a new facility, building a new facility, expanding or remodeling your current building, or refinancing then you just may want to consider an SBA loan.
And just FYI…the other SBA program (the 7a) for commercial real estate (and other things) technically has NO maximum loan to value and is available at 100% loan to value/project costs for some transactions. For instance, medical doctors, dentists and others routinely get 100% financing under the 7a program.
Please click here for more info about these programs.