SBA loan?

Commercial Real Estate Investing
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SBA loan?

Rob ShahPro Member
Real Estate Agent · Chicago, IL · Member since 2013 · 57 posts · 18 votes
I live in chicago and was wondering is it possible for get funding from the SBA for an apt building I am interested in buying? Are the credit rules more relaxed or more stringent? Thanks Rob
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Account Closed
Real Estate Investor · Chicago, IL · Member since 2008 · 1k+ posts · 218 votes
12y

The SBA will not do an apartment building unless it is a mixed use building and your business will be located there.

If the building is in Chicago, check out the Community Investment Corporation for loans.

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  • Stephen Underhill
    Investor · Lafayette, IN · Member since 2013 · 64 posts · 1 vote
    12y

    from my research into SBA, you cannot obtain loans for funding real estate purchases. you may be able to get something for marketing etc for your business, but im pretty sure their rules stipulate purchasing real estate is not a permissible use of funds.

    0Reply
  • James Syed
    Real Estate Broker · Mount Olive, IL · Member since 2013 · 1k+ posts · 310 votes
    12y

    @Rob Shah Not sure if you could use sba funding for real estate investment. Contact a portfolio lender if conventional financing is an issue for you.

    Hope it helps.

    0Reply
  • Brian L.
    Wholesaler · Westminster, CO · Member since 2014 · 309 posts · 104 votes
    12y

    I think @Stephen Underhill is correct. If I remember correctly you can use a SBA loan to buy real property for your business if your business needs an office, warehouse, store front, etc. However, real estate purchased solely for the purpose of investment is not an acceptable use of a SBA loan.

    0Reply
  • Stephen Underhill
    Investor · Lafayette, IN · Member since 2013 · 64 posts · 1 vote
    12y

    @Brian L. Thanks, thats what i meant to say, in terms of renting out their terms say no dice

    0Reply
  • Bill Gulley
    Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
    12y

    SBA does commercial RE, not residential-commercial. Office-warehouse, restaurant, factory, storage-warehouse, with ongoing business concerns, owner occupied. :)

    0Reply
  • Account Closed
    Real Estate Investor · Chicago, IL · Member since 2008 · 1k+ posts · 218 votes
    12y

    The SBA will not do an apartment building unless it is a mixed use building and your business will be located there.

    If the building is in Chicago, check out the Community Investment Corporation for loans.

    2Reply
  • Rob ShahPro Member
    OP
    Real Estate Agent · Chicago, IL · Member since 2013 · 57 posts · 18 votes
    12y

    Thanks everyone for your insights!

    @Account Closed the building is located in Elgin, IL. Will it still qualify?

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  • Account Closed
    Real Estate Investor · Chicago, IL · Member since 2008 · 1k+ posts · 218 votes
    12y

    No clue, give them a call and find out.

    0Reply
  • Jared RineBusiness Member
    Lender · Sacramento, CA · Member since 2009 · 1k+ posts · 277 votes
    12y

    Rob,

    Mr. Steele is definitely spot on as far utilizing SBA for mixed use, otherwise an apartment complex is going to have to be financed conventionally or by other means.

    I do commercial real estate lending, and as far as you qualifying, there are many factors that haven't been brought up, and as far as credit qualifications regarding different programs or the difference between conventional, SBA, or even private conventional type financing, it really just depends on the lender.

    Just my .02

    If you need help in the future, don't hesitate to contact me.

    Jared Rine United Lending Partners53 Reviews
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  • Ahmed Porter
    Contractor · washington, Washington D.C. · Member since 2011 · 204 posts · 64 votes
    12y

    I think Brain said it best you can get a loan but it has to be for your business to occupy. They also have there requirements also so you have to find out there guide lines and meet them such as area credit what type of business etc. The easy thing to do is call and if you go to there site they have it were you can E-mail question and someone will E-mail you back or call you back. AT present I am doing the same thing its a class I have to take and it starts May in the Dc area if I find out more will post it for all.

    0Reply
  • Rainier Guiang
    Real Estate Investor · Tustin, CA · Member since 2014 · 22 posts · 1 vote
    12y

    One of the stipulations when I was looking into an SBA loan is that your business must occupy at least 51% of the occupiable space. Hope this helps.

    1Reply
  • Bob Beckman
    Merion Station, PA · Member since 2014 · 3 posts · 0 votes
    12y

    Rob, we specialize in financing multi family properties, and I can tell you as a fact, the SBA does not fund residential (even if it is for business purposes).

    0Reply
  • Emma Watson
    Investment Banker · Los Angeles, CA · Member since 2015 · 38 posts · 6 votes
    10y

    When you need some money to start, build, or grow your business, you’ll want to know the differences between business loans and business lines of credit. Each serves a unique purpose that could propel your business forward. Knowing the differences will help you make the best decision about what is best for you and your company at the moment you need capital.

    https://merchcash.com/resources/post/ways-to-utilize-a-merchant-cash-advance/

    0Reply
  • Karen Schimpf
    Lender · Nat'l Commercial Mtg Lender - Round Rock, TX · Member since 2014 · 916 posts · 235 votes
    10y

    @Rob ShahNo SBA does not lend on apartment buildings.  Under the SBA SOP guidelines real estate investors are not considered a business.  

    0Reply
  • Mary Ann
    Investor · Polk County, FL · Member since 2014 · 144 posts · 36 votes
    10y

    what about coworking spaces or live/work mutlifamily?

    0Reply
  • Bo S.
    Seattle, WA · Member since 2016 · 46 posts · 14 votes
    7y

    bump

    0Reply
  • Benjamin Zhang
    Member since 2018 · 8 posts · 4 votes
    7y

    I am a SBA Loan Underwrite. You can only use SBA loan to finance owner occupied properties such as gas stations, restaurant properties. You CANNOT use SBA loan to finance investor properties such as apartment building, multifamily etc.  

    2Reply
  • Frank Lin
    Lender · Tustin, CA · Member since 2016 · 24 posts · 10 votes
    7y

    I work for a SBA lender. In the Standard Operating Procedure, it says "Business Loan Proceeds Restrictions, Loan proceeds may not be used for any of the following purposes (including the replacement of funds used of borrowed for any such purpose): Investments in real or personal property acquired and held primarily for sale, lease or investment. In addition, Apartment buildings and mobile home parks are not eligible." - in case anyone was wondering where it says in SBA eligibility

    2Reply
  • Genna Golden
    Rental Property Investor · Portland, OR · Member since 2009 · 81 posts · 30 votes
    7y

    We had an SBA loan. You must occupy 51% of the building. Be careful with the loan terms though. They don't want you backing out early and there are penalties. They would not consider the coworking/desk share model for me for a new loan, though if I'd had operating financials on a previously existing desk share then they would consider that my business for an SBA loan.

    1Reply
  • Charlotte Grant
    Tallahassee, FL · Member since 2017 · 4 posts · 2 votes
    6y

    @gennagolden can you give a brief description of the type of loan u were able to secure from the SBA

    1Reply
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