As part of the massive spending bill known as the American Recovery and Reinvestment Act of 2009, TALF (Term Asset-Backed Securities Loan Facility) is designed to open up the credit markets and increase all types of consumer and business lending. One part of TALF that should get the attention of small businesses is the $730m provided to the Small Business Administration (SBA). These funds are to be used by the SBA for temporary loan fee reductions, the 504 real estate lending program and the the micro-loan program (under $35,000), as well as other programs.
The SBA 504 program provides financing for up to 40 percent of your commercial real estate purchase at a below market fixed interest rate as long as your business will be the primary occupant of the property. The loan fees are about $12,000, but under TALF they’ll be waived for a limited period of time. You’ll need to come up with a 10 percent downpayment and the participating bank will finance the other 50 percent. In a nutshell, if you are looking to buy an office building , a warehouse or another commercial property to operate your business from, you should consider this SBA program.
Conventional commercial financing is available today at attractive terms from community banks. I have spoken to many commercial lenders in the Metro Boston South, South Shore and Southeastern MA regions who are eager to make loans on owner occupied properties. Competition among these banks for new commercial mortgage business presents good opportunities for buyers, but be ready for stringent mortgage qualifying requirements.
