SBA 504 Loans for Real Estate Agents
How 504 Loans Can Help Real Estate Agents and Realtors
The SBA 504 loan program is designed for small businesses, and enables them to purchase real estate, buy or construct buildings, modernize their facilities, improve energy efficiency, and more. Realtors can take advantage of this government-backed program in a number of ways.
One common way to find success as a realtor is to use an SBA 504 loan to build your real estate office. The funds can be used for land, improvements, construction, retrofitting, and more. However, commercial realtors can do more – they can work with lenders and CDCs to help small businesses find the funding they need to purchase commercial real estate in the first place. This allows you to overcome one of the largest hurdles your clients face – the financing portion of bringing their dream business to life.
SBA 504 Loan Restrictions and Alternatives
With that being said, it’s important to understand that there are restrictions with these loans. For instance, the funds cannot be used to lease anything, nor can they be used as working capital. Borrowers looking for a source of working capital financing should instead look to the SBA 7(a) loan program, which, like the 504 loan program, offers loans in amounts of up to $5 million. Other SBA loan options include SBA express loans and SBA microloans. SBA express loans are a variant of the SBA 7(a) loan that can be approved faster. These loans are offered in amounts of up to $350,000. In comparison, microloans are loans designed for smaller, startup businesses, and are offered in amounts of up to $50,000.
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