Can I expect having a 20%-40% down payment on a loan of 225K?
[deleted]
[{"id": "g11mins", "text": "Congrats on finding a great building! Typically a mortgage on an owner-occupied property will require a down payment between 20 and 25% depending on your strength as a borrower, along with 2-3 years of strong business tax returns.", "replies": [], "depth": 1}, {"id": "g11mkz9", "text": "Yes 25% down personal guarantee", "replies": [], "depth": 1}, {"id": "g11rfxf", "text": "Is it an established business? I\u2019m not super familiar with SBA but I think you might be able to get 100% financing if you occupy the commercial space. Don\u2019t quote me on that though.\n\nEdit - 10% down. Is the norm but it looks like 100% is possible. Check this link below. \n\n\nhttps://www.sba7a.loans/sba-7a-loans-small-business-blog/100-percent-commercial-property-financing\n\nAlso not sure why I\u2019m getting down voted? This sub has some weird downvoting culture.", "replies": [{"id": "g12b1ec", "text": "SBA 504 requires 10% down.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g11spac", "text": "25% down for commercial loan.", "replies": [], "depth": 1}, {"id": "g11vgrm", "text": "SBA 504 will give you up to 90LTV and a very competitive interest rate. Higher closing costs but if you are there for the long term it is probably a great option.", "replies": [], "depth": 1}, {"id": "g1208y3", "text": "SBA has to address all available collateral. If there is no additional collateral to take a lien on, you may be able to get by with significantly less equity down.\n\nBut keep in mind it would only be eligible for SBA if it is an owner occupied building. \n\nIf it is an investor property, you may get lucky and find someone conventionally willing to offer 15% down if it\u2019s a strong tenant. Likely looking at 20-25% though. \n\nAnother Avenue would be through the USDA B&amp;I program if it is in a \u201crural\u201d market. Rural meaning a population of less the 50k. It\u2019s a great program! Hopefully this is helpful.", "replies": [{"id": "g1269w8", "text": "Yeah everyone is like SBA is 90% LTV and fail to mention (or understand) it\u2019s for owner occupied only. It\u2019s a small business loan to help small businesses.", "replies": [], "depth": 2}], "depth": 1}, {"id": "g12g8ma", "text": "I think what the other posters are referring to is a federally backed program that is administered through the states. It allows you to finance with 10% down, the other 90% is split 40/50 between the lender and the govt. agency. The good parts are the low down payment and the ability to amortize repayment over 20 years or more. The drawbacks are: 1) It is it is for owner-occupants only, that means owner must use at least 51% of space. 2) There is a penalty for prepayment (but in some cases you may be allowed an early out if you can find a buyer to assume the loan or the new buyer writes a new loan at equal or higher terms, but that's sometimes- not always. They give you a break going in they want ALL the interest ) and 3) It still balloons like a commercial loan every five to seven years depending on your lender so there are still a lot of unknowns about how much it will really cost.\n\nAnd, oh yes, to participate in this program there is a literal ton of paperwork - all your taxes and financials and multiple review committees; so write the contract with a  L-O-N-G  close and make sure the seller understands that it will not be rapid. No matter what they tell you, it will take longer.\n\nDon't use a residential realtor for a commercial transaction and don't assume that because you know about buying a house you know anything about buying commercial property.", "replies": [{"id": "g130f1u", "text": "Very well said thank you!", "replies": [], "depth": 2}], "depth": 1}]