I'm currently in the process of acquiring a distribution company and am ready to submit a Letter of Intent (LOI). However, I've encountered a hurdle with the lease terms. The landlord is only willing to offer 2-3 year leases, while SBA loans require a 10-year lease to match the loan term.
I'm looking for advice or recommendations on alternative investors or loan options that don’t require such long lease agreements. Has anyone successfully navigated a similar situation using non-SBA funding? Any insights on alternative funding sources or strategies would be greatly appreciated.
Not that the short term lease is to be over-looked, but something I will workout in the contract
Thank you in advance for your help!
This doesnt answer your question but may help:
Im a commercial real estate landlord rep, I've ran into this a few times from the landlord side. You could try asking the landlord for a few lease renewal options. Typically the SBA is fine with it if the options run through the loan maturity date. Most landlord's will agree to a few options although they may be concerned about locking in a low rental rate for an extended period of time so you may have to give up on some rent increase language.