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  1. 1. Finalizing a Small Business Administration loan (SBA loan) and refinancing a small business loan can frequently be among the most difficult commercial mortgage and business finance circumstances for a business investment borrower. There are successful business financing and commercial real estate loan strategies for both commercial loan situations.
  2. 2. There are many business finance and commercial mortgagemisunderstandings involving the use of a Small Business Administrationloan (SBA loan) to buy a business opportunity investment or commercialreal estate This article will provide an introduction to several factors thatbusiness borrowers should explore before proceeding with thisspecialized type of business loan Finalizing an SBA loan and refinancinga Small Business Administration loan are two of the most problematiccommercial mortgage and business loan scenarios for business owners
  3. 3. There are practical business finance solutions for both of these commonbusiness investment problems Are SBA Loan and Business FinancePrograms Difficult? There are usually two schools of thought aboutgetting a Small Business Administration loan to buy a business: (1) Avoidthis kind of commercial loan at all costs (2) Use this kind of loan if it ispractical to do so
  4. 4. These conflicting investment financing viewpoints are due to acommercial mortgage business loan process that is perceived ascomplex and difficult by many commercial borrowers In reality SBA loanprograms are more practical than they often appear It is critical to thesuccess of a Small Business Administration loan program to be workingwith a business finance advisor and lender that is proficient at this difficultcommercial mortgage and commercial loan process
  5. 5. There are many potential commercial financing problems to avoid whenattempting to obtain a small business loans, and very few lenders areskilled in this business financing area Expecting Business Investing andFinancing Difficulties: Business Loan Refinancing One of the major investment drawbacks of an SBAloan has historically been the difficulty of refinancing the Small BusinessAdministration business financing later Current options have revised thesituation and it is more feasible to arrange refinancing
  6. 6. It is still accurate to say that refinancing is not routinely available, butmore importantly it is much easier to obtain than it was in prior yearsAdvance commercial real estate loan and commercial loan planning canavoid some of the SBA loan refinancing problems First and foremost, ifthe original business financing is arranged without a small business loan,this will make later business refinancing easier than if a Small BusinessAdministration loan is involved
  7. 7. This means that commercial borrowers should at least consider if theinitial business loan requires this form of commercial financing beforeproceeding Obtaining a Small Business Administration Loan: TwoCommon Commercial Loan Misunderstandings One of the most frequentcriticisms of an SBA loan program is the amount of paperwork required tocomplete the business loan and commercial mortgage process Whatmany commercial borrowers fail to understand is that any businessfinancing process is likely to involve substantial paperwork and formaldocumentation requirements
  8. 8. In the end the key is working with a business finance advisor thatunderstands what is required and can facilitate the submissionprocedures Beyond the paperwork concerns, a more critical and realproblem is working with an SBA lender that is not very good atsuccessfully completing Small Business Administration loan requirements There are not many commercial lenders who are routinely effective atfinishing this complex loan process with timely and successful results
  9. 9. Alternatives to SBA Loan Financing - Conventional Real EstateInvestment and Business Opportunity Loan Options Conventionalbusiness finance options should always be considered simultaneouslywith the possibility of obtaining an SBA loan As noted above, thefeasibility of refinancing a business loan or commercial real estate loan inthe future will depend heavily on the choices made by a commercialborrower when obtaining the initial commercial mortgage A conventionalbusiness loan or commercial mortgage might be more feasible than manyborrowers realize
  10. 10. Refinancing is likely to be more successful if an experienced businessfinance lender and advisor are involved Article Tags:
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