Small Business Lending Tip: How to Finance an SBA Loan with Only 10% Down

You may already know that SBA loans provide many distinct financial benefits for small businesses. One substantial advantage of SBA financing its ability to ease the overwhelming and expensive process of purchasing commercial real estate. Buying commercial property can be the biggest sound investment for your company and the biggest cost. And it can be the most complex undertaking for any type of business. With most other types of loans, borrowers often get stuck paying 20-30% down, but with an SBA loan, a minimum of only 10% down payment is required. A small business can take advantage of this benefit in three ways:

1. Proven Business History
In this situation, the 10% down payment is given as a reward for overall business stability. A history of business management experience and a steady cash flow are a few of the characteristics of these strong applications.

2. Business Assets
If a borrower is still building the strength of his or her business’ track record, he or she can offer additional collateral in the form of business assets.

3. SBA Allowance
The seller can elect to carry a 2nd lein on the property that they are selling to the small business owner. This means less negotiation time and a quicker sale.