Small businesses looking to purchase real estate can use an SBA loan for 100% financing

How small businesses can purchase real estate with no down payment with an SBA 7(a) loan.

Let’s have a little Q&A about gaining 100% financing for your small business real estate purchases.

What are the benefits of using an SBA 7(a) loan?

Real estate financing usually requires a 10-20% down payment. However, with this offer from the SBA, you can expand your business and place money allocated for a down payment back into your company. Depending on the size of your loan, 10-20% can be a significant amount of money to put toward equipment, inventory or even a new employee. 

Does the SBA need to approve my loan directly?

No, American National Bank is an SBA preferred lender, allowing us to underwrite your deal in-house and provide faster approvals. 

I thought SBA only had floating rate options, correct?

Actually, the bank offering the loan has the authority to offer fixed-rate options and will determine rate options based on the risk of the loan. 

Do SBA 7(a) loans come with hefty fees?

The SBA is currently offering no fees for loans under $1M and reduced fees for loans under $2M that close before September 30, 2024.

Are there unique stipulations?

Along with evaluating credit, businesses who qualify will need to occupy at least 51% of the property. 

Are there other SBA qualifications?

The borrower must meet all eligibility requirements set forth by the SBA program to qualify as a small business. Our small business team will help identify any potential eligibility issues.

How have other clients used this offer?  

We recently had a client looking to purchase a building for $1.5 million. This client had been leasing space for more than 10 years and was looking for a space of their own to build additional equity. The company qualified for traditional financing options as it had strong historical cash flow, high credit scores for the guarantors, along with qualifying industry benchmarks. Instead of going the traditional route and placing 20% down, we used SBA 7a financing with no down payment. Rather than putting $300,000 into the loan, they hired a new salesperson to help grow the company.  

Our small business banking team will bring expertise and guidance at every step.  

We’re more than bankers. We’re also advisors who put in the work to understand your goals. We know what it takes to turn an idea into profit, and we’ll honor your dedication and provide expert insight along the way. In the end, you’ll gain the financing you need and have more people with know-how on your team. Doing more is foundational for small business and we take pride in doing more for you.

We look forward to doing more for you. 

Ready to get started? Contact me directly.

Kalen Schwartz
Vice President, Commercial Banking Team Leader
903 Washington Avenue S, Minneapolis, MN 55415

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