Pro/Cons of Real Estate in SBA Transactions

by a searcher from Columbia University - Columbia Business School

1 year ago

Hi all, 

I'm looking at a potential deal right now which includes the option to purchase the commercial real estate where the business currently operates. 

What are the potential benefits of adding real estate into an SBA transaction? Any good reasons to lease instead? 

Thanks a lot!

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searcher from The University of Texas at Austin - Red McCombs School of Business

^Searchfunder member‌

1 year ago | like reply | 1 like

intermediary from California State University, Northridge

Get a broker's opinion of value on the real estate, should not cost you anything. If you can sell the real estate for more than you can acquire it for (with you leasing it back as the tenant), it's something to consider to help with acquisition financing or simply adding more cash to the balance sheet. The argument "for leasing" is that the rent payments are an expense on your P&L lowering your taxable income

1 year ago | like reply | 1 like

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