Re: stuck for a solution. - Posted by JohnBoy
Posted by JohnBoy on May 14, 1999 at 22:20:49:
Since your planning on housing your business at this property you can apply for an SBA Loan. They have a LowDoc Program that allows you to borrow up to $150k. They use a one page application that you fill out on one side and the lender fills out the other side. SBA will give you an answer within 36 hours!
SBA insures 80% up to the first $100k and 75% on anything over $100k. The bank will have the property AND an 80% guarantee from SBA on your loan! If you have decent credit, this should be a slam dunk for you!
What you need to do is sit down and draw up a business plan on your business showing what the money will be used for, two years of sales projections, etc.
Once you have the business plan together go to a bank that does SBA Loans. Go straight to the commercial loan department and talk to them as if you want them to write the loan. If that doesn’t work out then tell them to submit it to SBA.
SBA will allow small business loans to purchase a business, expand an existing business, borrow working capital, purchase equipment, AND they will allow you to borrow to purchase a commercial property as long as your business will be occupying the building to run your business!
I just did one of these and I wasn’t buying any real estate. Mine is in a shopping center under a commercial lease. They are using the equipment and lease hold improvements as the collateral.
I borrowed the full $150k they allowed under this program. $85k towards equipment, $41k for working capital, and $24k for lease hold improvements!
SBA came back and said they wanted to see me come up with $10k - $15k of my own money torwards this ON TOP OF THE $150k they loaned! I had the bank lend $12k as an equity loan against my house for the down payment and after we closed on the loan I paid off the equity loan.
Put your business plan together focussing on the business you have instead of the actual property as your primary reason. Show them how this will allow you to expand and grow your business by relocating to this building. If the credit is good and the plan shows the bank how this makes good business sense by you buying this property to expand your business then it should be a slam dunk!
Don’t go into the bank and “ask” them if they think they would be willing to give you a business loan. Rather, walk in there like your confident that by getting this loan it only makes good business sense and there’s no reason why the bank should give it a second thought about not approving this! In other words, “EXPECT IT!”
It’s all in how you present yourself to the bank. Do this right and they will bend over backwards to get the loan approved for you!