Loan options for commercial real estate acquisition

by a searcher

1 year ago

I've been presented with an opportunity to purchase a commercial property, but only the physical structures are included in the deal. The land that they are sitting on is leased for a 96 year term. Would something like this still be eligible for an SBA loan under the 7a or 504 programs?

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lender from Clemson University

It is eligible we did an Ice skating rink at my previous bank through SBA there was a ground lease from the county for 50 years. Colin is accurate on the language have a land use attorney look at the lease agreement bc there may be language that says that the county or municipality may take possession of the land at any time and if you have that business, you are out of business.

1 year ago | like reply | 0 likes

lender from University of Missouri - Columbia

Adam, is it owner occupied? The likelihood is it would be eligible but there is often language in the land lease that conflicts with SBA requirements (especially true with Fed Govt land leases). If the owner of the property is amenable to possibly changing some wording on the land lease, then it should be SBA eligible.

1 year ago | like reply | 0 likes

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