Buying Commercial Property that houses my business

[Vincent Priore]

I own a successful small business that's located in a small retail strip. We have just over 50% of the square footage, and there are three other business located there. I would like to buy the property but I believe the value is around $1.35M. I don't have nearly the cash I would need to go the conventional 30% down route. I need some advice on how to creatively finance this deal. I'd like to keep my business where it is long-term and would love to own the property.

[Dan Wallace]

Originally posted by @Christine Luong:

Hi,

Currently own my property ( in a strip mall) where my small business is occupying one of the retail suites (on our 4th year now), I'm on SBA 504 loan (25 years) and since I already passed the 3rd year and realized that I don't need the space anymore (nature of business changed - we have more online sales than walk-ins) can I lease my suite out?

 Christine,

I have not reviewed the SBA 504 Authorization in detail recently but I am sure there is some sort of equivalent to a "material adverse change" in the either the SBA's document or your conventional lender's note. I have done a number of SBA 504 deals where the owner has vacated the property and kept as an investment but am not aware of a situation where either the SBA or the conventional lender has tried to call the note due under this type of loan covenant. Most correct answer is to refinance the note to conventional terms but otherwise as long as you keep paying on the loans I doubt much will happen.