SBA '504' Loans

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04/21/2010

http://news.investors.com/article/617922/201207121628/small-business-property-loans-boom-as-owners.htm

Sounds like a great deal if it can be used on a B&B. I did read another article about how people are buying with SBA loans. does anyone have experience with these? 10% down is pretty attractive.

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04/21/2010

We are on the site "B&Bs for sale dot com".  I get an email every few days that something sold. I guess i will start following up and see if we can find out the method of financing.

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10/07/2008

toddburme wrote:

We are on the site "B&Bs for sale dot com".  I get an email every few days that something sold. I guess i will start following up and see if we can find out the method of financing.

I was going to list with them http://www.bedandbreakfastforsale.com/ , but the lowest priced listing (which gives you virtually NO for sale info) is $180 for 6 months, and they don't include a LINK to your website!  I inquired about this and was told "Do you want me to ask the owner for a discount for you?" which was quite rude. So I went to BnBfinder which is $75 for 6 mo's! http://www.bnbfinder.com/Bed-and-Breakfast-For-Sale/

Be aware that some that show SOLD on there are also listed on multiple websites, for example the B&BTeam listings, B&BTeam is the listing agent for them.

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muirford's picture
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05/22/2008

 I have just heard of a B&B that was bought with a local bank giving a residential loan for the building and an SBA loan for the business.  Seems like that might be a good thing if a bank is willing to do it.  Residential rates are lower than commercial, and usually fixed vs. variable.

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gillumhouse's picture
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05/22/2008

Here is the answer:

The 504 loan is available but it’s more complicated (as usual!).  The advantage, as you see from this article, is that using a 504 guaranty helps you spread out the business loan so you can use it for real estate, say over 25 years.  That’s good. 

 

However, quoting our web site “ 504 Loans are typically structured with SBA providing 40% of the total project costs, a participating lender covering up to 50% of the total project costs, and the borrower contributing10% of the project costs.”  504 loans are made available through Certified Development Companies (CDCs). 

 

There is also a job creation requirement—typically one job for every $65,000 guaranteed by the SBA.  

 

So, yes they exist but it’s not for everyone. 

 

gillumhouse's picture
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05/22/2008

I sent an e-mail to a friend who works for SBA asking about it.

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