Owner-occupied and Small Business Real Estate Loans

If your business occupies 51% or more of the building you are buying, refinance or constructing, then MortgageCerv Financial can help you find outstanding financing. We will present your loan request to a variety of SBA (Small Business Administration) lenders, banks and other owner-occupied lenders to find you the best deal for your situation.

Typical Owner Occupied Property Financing Terms

Note: These are not terms of any specific lender. They represent terms that we frequently see in the marketplace and are not to be relied on as a commitment to provide any specific terms for any specific deal.

Loan purpose:	Purchase of real estate and business, refinance of real estate, construction of new facility. Please note that SBA loans do not allow for cash out, SBA loans cannot be refinanced with SBA loans, and SBA loans can only be used to refinance unreasonably expensive existing loans.
Maximum loan to value:	SBA lenders can lend up to 90% of the value for a purchase and 85% for a refinance. Conventional lenders typically lend up to 75% for general purpose properties and 70% for special purpose properties. We have a small number of commercial lenders who will go to 90% if you are willing to pay a higher rate. Note: We have NO lenders that offer 100% financing on any type of commercial property.
Debt service coverage:	The cash flow from operations must be at least 1.25 to 1.30 times the mortgage payment.
Term:	5, 10, 20 year terms are most common.
Amortization:	20, 25 or 30 years if building is in good repair. Typically 20 year loans are full amortizing.
Typical Rates:	10-20 year fixed = 10 yr US Treasury bill rate + 2.5%+ 5 year fixed = 5 yr Treasury + 2.0% to 3.0% ARM = Prime + 1.5% to 3.0%
Prepayment terms:	For loans over 15 years: 5% in year 1, 3% in year 2, 1% in year 3. May prepay up to 25% during first 3 years without penalty. No prepayment penalty for loans less than 15 years.
Management experience:	The business owner must have experience at successfully running a similar business. The lender wants to be certain the business will succeed.
Closing costs:	Borrowers are responsible for all due diligence and closings costs (e.g. Appraisal, Phase 1 Environmental, site inspection, title, etc) These costs typically range from $6,000 to $12,000. In addition, SBA loans have an SBA Guarantee Fee (a government fee) from 1.5% to 3.0%.   Call 478-451-9977