Financing

Before you start looking at schools, you must determine which financing options are available to you based on your individual financial circumstances. This information establishes what price range of the center will best accomplish your purchase objectives.

 

We can arrange financing through lenders offering both SBA and conventional loan programs. To begin exploring your financing options, please Contact us to request a Buyer Profile package.

SBA 7(a) loans

SBA 7(a) loans are the most basic and the most used type of loan of SBA’s business loan programs. Its name comes from section 7(a) of the Small Business Act, which authorizes the agency to provide business loans to American small businesses through private lenders.

 

Loan amounts

  • No minimum - max $5,000,000

 

Borrower Benefits

  • Long repayment terms, reducing monthly payments.

  • Frees up cash flow to expand your business.

  • Low down payment of as little as 10% on multi-purpose real estate acquisition and as little as 15% on single-purpose real estate acquisitions.

  • Financing available for most industry types including hotel/motel, gas station, convenient stores, restaurants and daycare.

Use of Proceeds

  • Real estate-purchase, construction, renovation or refinance of commercial real estate. Majority of space must be owner occupied. Loans up to $5 million.

  • Business acquisition – business, franchise or professional practice. Loans up to $5 million

  • Real estate – up to 90% financing, after 25 years, pre-payment penalty for initial three years, none after the end of year three.

  • Business acquisition - up to 75% financing (or 80% was seller financing component), up to 10 years, no prepayment penalty.

  • Refinance – up to 100% financing, after 25 years, pre-payment applicable for initial three years on terms greater than 15 years.

  • All 7A loans are fully amortized and are assumable.

Image by Alexander Mils
Image by rupixen.com

SBA 504 Loans

The 504-Loan program is a long-term financing tool for economic development within a community. The 504 program provides growing business with long-term, fixed rate financing for major fixed assets, such as land and buildings.

 

Loan amounts

  • $5,000,000+

Borrower Benefits

  • Low down payment of only 10%.

  • Loan down payment of 15% on start-ups or special purpose deals.

  • Loan down payment of 20% on any loan that is both a start-up and a special purpose deal. (An exception exists if you have already owned a similar business for more than two years – It allows you to get a loan with only 10% down)

  • Long term repayment – reducing monthly payments.

  • Frees up cash flow to expand your business.

  • Many rate options including long-term fixed rates.

  • You can refinance existing real estate debt.

Use of Proceeds

  • Purchase, construction or renovation of owner-occupied commercial real estate.

  • 51% of the space in an existing building must be owner occupied.

Terms – First Mortgage

  • 25 years, fully amortized.

  • Fixed, floating in adjustable rates available.

  • Competitive fee structure.

  • Prepayment penalty applies and is set based on various factors.



 

Terms – Second Mortgage

  • 25 years, fully amortized.

  • Fixed rate is determined at SBA-guaranteed 504 debenture sale.

  • Fees set by CDC.

  • Pre-payment penalty for initial 10 years, none after the end of year 10.

  • Is limited to $5,000,000 or if built Green you are limited to $5,500,000.

Conventional

Conventional Lenders can provide up to 80% financing for childcare businesses.

 

Loan amounts

  • $20,000-$20 million

Borrower Benefits

  • A wide variety of lenders allows you to shop for a favorable rate.

  • Provides capital to start or expand your business.

  • Low down payment of as little as 20%.

Use of Proceeds

  • Real estate - purchased, construction, renovation or refinance of commercial real estate.

  • Business acquisition – business, franchise or professional practice.

  • Machinery and equipment – purchase or refinance.

  • Start-up – new construction of center facility, franchise businesses.

Image by Nathan Dumlao