Commercial Property Loans Austin

Small business have faced a dilemma with the contraction in the credit markets for commercial property loans. Currently, the SBA has restructured their 504 Program to allow for refinancing of equity debt on a commercial property for long term working capital needs.  Small businesses usually have trouble with long term financing on commercial property loans.  Based on the recent movement in the lending industry, a lot of businesses have financed their commercial property with a balloon payment in which they business owners are banking on a refinance with the balloon comes due.

The recent downturn has caused many businesses to scramble as their mortgage comes due without having any assurances that they would be refinanced. As businesses scramble for commercial property loans it puts a lot of pressure on them for budgeting, and planning for longer term growth.  The SBA 504 program allows the business owners to refinance their existing debt with a long term commercial property loan. If you are a commercial property owner and have more than 10% equity in your property, you can borrow against that equity for working capital.  The SBA sells 10 and 20 year bonds to guarantee the property loan. Because of the sales of bonds, this commercial property loan usually has a lower than market interest rate , recent rates have been as low as 5.04% for a 20 year period.

To be eligible for this loan, your business must be in operation for at least 2 years and be a for profit business with a net worth of less than $15 million and an after tax profit of less than $5 million for the previous 2 years. You must currently occupy 51% of the commercial property in Austin and you must have acquired the property at least 2 years ago.  You must have good credit, showing that you have not been late on your payments of your note more than 30 days over the past 12 months. Although this program exists for business owners the credit requirements are still fairly tight.