Commercial Mortgage and Business Loan - SBA Loan Working Capital

Finalizing a Small Business Administration loan (SBA loan) and refinancing an SBA loan can frequently be among the most difficult commercial mortgage and business financing circumstances for a business borrower. There are successful business loan strategies for both SBA loan situations.

Are SBA Loan and Business Financing Programs Difficult?

The prevailing wisdom about buying a business with an SBA loan can be summarized as follows: (1) Commercial borrowers would be wise to avoid an SBA loan. (2) Commercial borrowers would be wise to use an SBA loan. These opposite perspectives are due to a confusing SBA business financing process that is perceived by some business borrowers as too complex.

Despite the negative atmosphere surrounding the SBA loan process, it can be worth the time and effort for many borrowers. There are critical business financing and commercial real estate loan obstacles to avoid with an SBA loan, and there is only a small number of capable lenders in this demanding commercial mortgage and working capital area. It is vital for a successful SBA loan program to involve an SBA loan advisor that is skilled at this rigorous business loan system.

Can an SBA Loan Be Refinanced?

One of the major drawbacks of an SBA loan has historically been the difficulty of refinancing the SBA business financing 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 SBA loan refinancing problems. First and foremost, if the original business financing is arranged without an SBA loan, this will make later business refinancing easier than if an SBA loan is involved. This means that commercial borrowers should at least consider if the initial business loan requires an SBA loan before proceeding.

SBA Loan Misunderstandings - The SBA Business Loan Process

One of the prevailing views of an SBA loan program concerns the documentation needed to finish the commercial mortgage requirements. The key to a successful SBA loan process is trusting the SBA loan facilitator about what is required. What business borrowers should try to realize before becoming frustrated by the SBA loan process is that any commercial loan process will include substantial paperwork whether an SBA loan is involved or not.

Beyond the paperwork concerns, a more critical and real problem is working with an SBA lender that is not very good at successfully completing SBA loan requirements. Even though there are many commercial lenders that publicize their ability to process an SBA loan, in reality there are very few lenders nationwide who are consistently successful at completing the SBA loan process in a timely manner.

SBA Loan Choices and Conventional Business Financing

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 loan possibilities should be evaluated along with the option of obtaining an SBA loan.

A conventional business loan might be more feasible than many borrowers realize. The possibility of refinancing either an SBA loan or conventional business financing will ultimately be more practical and successful when working with a skilled commercial mortgage advisor and commercial lender.

Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush. All Rights Reserved.

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Stephen Bush and AEX provide candid advice for business opportunity - business financing and commercial mortgage loan - commercial loan situations

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