Commercial Mortgage and Business Loan - SBA Loan Working Capital

Two of the most difficult business loan and commercial mortgage situations for a business owner involve obtaining a Small Business Administration loan (SBA loan) and refinancing an SBA loan. There are practical business financing solutions for both of these common SBA loan problems.

Is an SBA Loan and Business Loan Program Too Complicated?

The prevailing wisdom about buying a business with an SBA loan can be summarized as follows: (1) Commercial borrowers would be wise to avoid an SBA loan. (2) Commercial borrowers would be wise to use an SBA loan. These opposite perspectives are due to a confusing SBA business financing process that is perceived by some business borrowers as too complex.

In reality SBA loan programs are more practical than they often appear. It is critical to the success of an SBA loan program to be working with an SBA loan advisor and lender that is proficient at this difficult commercial mortgage process. There are many potential business loan problems to avoid when attempting to obtain an SBA loan, and very few lenders are skilled in this business financing area.

Is SBA Loan Refinancing Possible?

One of the major drawbacks of an SBA loan has historically been the difficulty of refinancing the SBA business financing later. Recent developments have changed this business loan situation so that it is now more practical to refinance an SBA loan. It is still accurate to say that refinancing is not routinely available, but more importantly it is much easier to obtain than it was in prior years.

The primary SBA loan refinancing problems can be avoided with some advance business loan planning. If it is feasible to arrange the original commercial mortgage without using an SBA loan, subsequent business refinancing will be smoother without SBA loan involvement. Business borrowers should evaluate if an SBA loan is required in the early business financing.

SBA Loan Misunderstandings - The SBA Business Loan Process

What most borrowers do not want to admit is that any business loan process is likely to require much formal documentation. In spite of this, one of the most common comments about an SBA loan program revolves around the paperwork to finalize the business financing. These issues will be minimized when working with an SBA loan provider who can effectively coordinate the SBA application requirements.

A more serious possibility for business borrowers is that they could end up with an SBA lender that is rarely successful in finalizing SBA loan applications. Judging the SBA loan process by looking at the frequency of both successful and timely outcomes for commercial borrowers, the harsh reality is that there appear to be far more ineffective SBA lenders than effective SBA lenders on a nationwide basis.

Alternatives to SBA Loan Financing - Conventional Business Loan Options

The practicality of refinancing a commercial loan will be determined by the commercial borrower decisions when acquiring the original business financing. In obtaining a commercial loan to buy a business, non-SBA business loan possibilities should be evaluated along with the option of obtaining an SBA loan.

Refinancing an SBA loan or conventional business loan will usually be more effective when using an experienced and successful SBA loan - business financing advisor and lender. Commercial borrowers should not overlook the feasibility of traditional commercial mortgage options.

Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush. All Rights Reserved.

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