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SBA 504 Loans: Commercial Real Estate Financing Up 16% in Sacramento

SBA-504 Loans:

Commercial Real Estate Financing Up 16% in Sacramento

Financing of commercial real estate purchases using SBA loans in Sacramento increased 16% in 2012 compared to 2011, according to CDC Small Business Finance, a leader in SBA lending.

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For calendar 2012,$241 million in financing was approved with 169 SBA-504 loans to help small businesses purchase commercial/industrial buildings.  In 2011, $207 million was approved through 126 SBA-504 loans.

“More small business owners are coming off the sidelines to purchase their own building with debt payments close to their rental rate,” said Ed Ryan, senior commercial loan officer for CDC Small Business Finance in Sacramento.  “In many cases, the lease savings allow businesses to hire new employees and stimulate job growth.”

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Ryan continued:  “It makes sense to small business owners to grow equity rather than pay rent.  They’re taking advantage of historically low interest rates before the existing commercial real estate inventory dries up.”

Over 1,100 jobs are projected to be created in Sacramentoas a result of SBA-504 financing approved in the last 12 months.

The 504 loan program was created by the SBA for the specific purpose of financing long-term fixed assets such as commercial real estate and equipment with economic life of 10 years or greater.

The current SBA-504 rate is under 5%.  For a six-year history of monthly SBA-504 rates, go to Rate History.

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