At Rogerson Business Services, we understand the importance of making informed decisions regarding commercial property transactions. That’s why we offer expert advice on the differences between SBA loans for buying businesses and commercial real estate. To assist a Buyer with an SBA loan, Scott Cisneros (916) 765-9443 with City National Bank has a team that has successfully closed my SBA loans.
When you work with us, you’ll learn about the significant differences between these types of loans, what works in today’s market, as SBA loan terms and conditions are constantly changing, and typical repayment periods and interest rates. For instance, while a typical SBA loan to buy a business has a loan repayment over ten years, an SBA loan to purchase commercial real estate is typically available to repay over 25 years.
More specifically, purchasing real estate with the business (SBA 7a loan) would require a blended loan term of 25 years for the business and 10 years for the real estate. If the real estate purchase makes up at least 51% of the entire purchase, then the whole purchase can be on a 25-year term.
Repaying an SBA business loan over 25 years leads to lower monthly payments and the added benefit of building equity in the business and real estate from day one.
Reach out to learn more about business and commercial real estate transactions. We will guide you through the detailed rules of SBA loans so you can make an informed decision.
Once the buyer and seller have been able to come together on the main deal points for the value and sale of the business and real estate, it’s time to open escrow to make sure the transfer happens in a smooth and coordinated way.
Finance is typically critical when the Buyer buys the business and the real estate.
Suppose the purchase of Real Estate includes an SBA loan. In that case, we will work with the SBA lender and help provide the particulars of the transaction, including an initial prequalification letter, guidelines for your downpayment, and other loan details.
Here is a summary of the typical steps to apply for an SBA loan.
For the Buyer who wants to buy a business and real estate, the SBA lender typically requires the following:
Contact us about SBA loans and other financing for selling and buying a business or commercial property. We will guide you through the detailed rules, including SBA loans and commercial finance, so that you can make an informed decision.
Building wealth through owning a business and real estate in California is never easy. There are highs and lows, and hopefully, plenty of ‘normal’ in between; plus, it takes work—plenty of hard work—and managing risk daily.
Your exposure to tax implications increases as you plan your next move – whether it be selling your business, selling your commercial real estate, or adjusting your investments.
Your financial success involves a team of advisors, which is our approach at Rogerson Business Services. That is, your effective tax reduction strategy requires a qualified navigator to coordinate all these disciplines into a logical structure.
To help you with tax-saving strategies, we will introduce you to Mr. Ed Cotney.
That’s all he does. Find ways of applying tax savings and minimization strategies on the financial, social, and emotional aspects of selling an asset worth $2M or more.
Ed’s primary approach is to teach his clients. This includes Ed sharing with you, the Seller, your personal tax and financial advisors, and heirs how to control tax triggers and erosion. Ed works with your existing tax, legal, and financial support team to advise optimal approaches to sell your business with as little tax exposure as possible, reducing your income tax by 30%-60% and selling appreciated assets with little or as low capital gains taxes as possible.
If you want to know more, visit Ed’s website at Olympus Tax. You can then schedule a time to talk to Ed. When you connect with Ed, tell him Andrew said to say ‘hi.’
If a business owner sells both their business and real estate, one option for selling the real estate is to do a 1031 Exchange.
At its most superficial level, a 1031 Exchange is an investing tool that allows the owner to sell their real estate, defer capital gains or losses, and acquire another investment property.
Internal Revenue Code 26 § 1031 allows you to exchange currently held real estate for a “like-kind” piece of real estate. In a 1031 Exchange, “like-kind” doesn’t necessarily mean “exact kind.” For example, the sale of an office building can be a 1031 Exchange for an apartment, vacation rental, land, commercial building, etc.
When considering a 1031 Exchange, it’s essential to determine the type of replacement property or properties that are available for an exchange.
If you don’t want to be an active landlord, consider a passive 1031 Exchange investment structure, such as a Delaware Statutory Trust (DST).
When you invest in real estate held in a Delaware Statutory Trust, you are considered to have acquired an undivided interest in that property (or properties) and, therefore, own a direct interest in the real property in proportion to your investment percentage. This allows you to qualify your investment as replacement property under the like-kind exchange rules of a 1031 Exchange. Because the DST sponsor manages and operates the property, investors enjoy the benefits of their investment with no management headaches.
Business owners regularly leverage the wealth-preserving and growing power of 1031 exchanges, but there are strict requirements of a 1031 exchange that add to the complexity of the process. With proper planning and a good team in place, a 1031 exchange does not have to be confusing or stressful.
If you want to know more, talk to Jamie Furlong* or visit her Legacy Investment Real Estate website. When you connect with Jamie, ask her to share the “5 rules of a successful exchange” and tell her Andrew said to say ‘hi.’
*Note: “Registered Representative and securities offered through Concorde Investment Services, Inc. (CIS), member FINRA/SIPC. Legacy Investment Real Estate, LLC. is independent of CIS and Rogerson Business Services. This is for informational purposes only and does not constitute an offer to purchase or sell securitized real estate investments. This material is not to be interpreted as tax or legal advice. Please consult your tax and legal advisors for guidance regarding your situation.
Once the buyer and seller have been able to come together on the main deal points for the value and sale of the business and real estate, it’s time to open escrow to make sure the transfer happens in a smooth and coordinated way.
Rogerson Business Services is a business brokerage service based in California.
If you are ready to sell your California business, let us know your questions. Whether you are selling a medical practice, an HVAC business, a landscaping business, or any other business with gross revenue greater than $2 million, contact us today to learn about our successfully selling your business program.
We’re happy to talk with you about the process of selling your business. Give us a call or contact us when you are ready.
