SBA Loan Commercial Mortgage and Business Finance Choices
Two of the most difficult business finance and commercial mortgage situations for a business owner involve obtaining a Small Business Administration loan (SBA loan) and refinancing an SBA loan. There are practical business financing solutions for both of these common business loan problems.
Are SBA Loan and Business Finance Programs Difficult?
There are usually two business finance schools of thought about getting a Small Business Administration loan to buy a business: (1) Avoid an SBA loan at all costs. (2) Use an SBA loan whenever possible. These conflicting viewpoints are due to a commercial mortgage business loan process that is perceived as complex and difficult by many commercial borrowers.
In reality Small Business Administration loan programs are more practical than they often appear. It is critical to the success of an SBA loan program to be working with a business financing advisor and lender that is proficient at this difficult commercial mortgage process. There are many potential business loan problems to avoid when attempting to obtain an SBA loan, and very few lenders are skilled in this business finance area.
Can an SBA Loan and Commercial Mortgage Be Refinanced?
One of the major drawbacks of a Small Business Administration loan has historically been the difficulty of refinancing later. Recent developments have changed this business loan situation so that it is now more practical to refinance an SBA loan. It is still accurate to say that refinancing is not routinely available, but more importantly it is much easier to obtain than it was in prior years.
Advance commercial mortgage planning can avoid some of the Small Business Administration loan refinancing problems. First and foremost, if the original business financing is arranged without an SBA loan, this will usually make later business refinancing easier. This means that commercial borrowers should at least consider if the initial business loan requires an SBA loan before proceeding.
SBA Loan Misunderstandings Regarding the Business Loan Process
One of the prevailing views of a Small Business Administration loan program concerns the documentation needed to finish the SBA loan and commercial mortgage requirements. The key to a successful business finance process is trusting the loan facilitator about what is required. What business borrowers should try to realize before becoming frustrated by the business loan process is that any commercial loan process will include substantial paperwork whether an SBA loan is involved or not.
A much more critical business finance issue that should be a real concern for commercial borrowers is that there are not many commercial lenders who are routinely effective at finishing the Small Business Administration loan process with timely and successful results. This can create a harsh reality of working with a commercial lender that is ineffective at successfully finalizing requirements for an SBA loan.
Alternatives to SBA Loan Financing - Conventional Business Finance Options
The practicality of refinancing a commercial loan will be determined by the commercial borrower decisions when acquiring the original business financing. In obtaining a commercial loan to buy a business, non-SBA business finance possibilities should be evaluated along with the option of obtaining a Small Business Administration loan.