Advantages and Disadvantages of SBA Loans for Real Estate
If you are looking for funds for those purposes, these are your best SBA financing real estate options. Other SBA products (Microloans, CAPLines, Disaster, and Export) either keep you from directly using the money for real estate, or are not arranged in such a way as to support those purchases.
If you are the owner of a small business that is performing well and has a credit score that starts at around 600, then you are a likely candidate for an SBA real estate loan. While the interest rate will vary according to the lender, it is based upon the present prime rate plus an interest spread that falls anywhere between 2.25% and 2.75%. Besides, some lending companies charge closing costs and fees, making the loan more expensive.
Lengthy Loan Application and Underwriting
You will want to remember that these loans are not usually the quickest way to access funds—one can take a maximum of 75 days to get funding. The SBA loan application process can be relatively more complicated than that of other kinds of loans, though as usual, you would have to be ready to show an SBA-approved lender your bank details, tax returns, business and personal credit reports, and other business-related documents.