The concept of owner-occupied commercial real estate, also known as owner-user commercial real estate, plays a crucial role in understanding lending options for businesses looking to finance a new property. Owning a property instead of renting comes with numerous financial advantages. With each mortgage payment, owners build equity, and over time, the property's value appreciates.
However, simply running a business from a property does not automatically make it eligible for SBA 504 financing from Liberty SBF. To qualify, the owner must occupy more than half (51% or more) of the building's leasable space for their business operations. Additionally, a business that shares ownership with a holding company that owns the property is also considered owner-occupied.
For those who meet these requirements, a US government-backed SBA 504 loan becomes accessible. This loan offers better financing options compared to other alternatives.
But what if you need a loan but don't expect to occupy more than half of the available square footage? In that case, Liberty SBF's Conventional loan presents a great alternative. With our Conventional loans, the borrower's business can occupy as little as 30% of the total square footage of the commercial property.
Various asset types qualify for owner-occupied financing, including industrial buildings, flex spaces, retail establishments, office properties, and professional medical offices. Special-use properties such as self-storage, assisted living facilities, skilled nursing facilities, healthcare properties, daycares, sports facilities, and event centers also meet the criteria. However, multifamily properties are not eligible for owner-occupied financing. Nonetheless, mixed-use buildings and hotels do qualify.
In 2010, the SBA expanded its programs to include some businesses with rental income, also known as passive income. This opened up opportunities for self-storage operators to benefit from the advantages of SBA 504 loans. Find out more about self-storage facility financing.
The SBA 504 loan provides small businesses that will be owner-occupiers with access to long-term, fixed-rate financing similar to what larger firms enjoy. Interest rates are equivalent to favorable bond market rates. To qualify for the loan program, you need sufficient liquidity and net worth, as well as plans to occupy more than 51% of the facility for SBA 504 loans or 30% for Conventional financing.
As an owner-user, you are considered a lower risk for lenders, who are assured of your commitment to the property as both landlord and chief occupant.
Liberty SBF specializes in SBA 504 and Conventional loans. We firmly believe that our owner-occupied loan programs offer advantages that no other loan can match, including:
- Up to 90% LTV (loan-to-value ratio) financing,
- Low fixed rates, and
- Terms up to 25 years.
Interest rates are currently low, presenting an excellent opportunity to secure a fixed-rate commercial real estate loan. When you choose to work with an experienced lender like Liberty SBF, you can have confidence that we will anticipate any potential problems and help you overcome any obstacles.
We pride ourselves on completing the job in 45 days or less. Contact us today to find out how we can assist you.