Commercial Mortgage Loan To Renovate, Retrofit, Modernize or Remodel
The Small Business Administration's 504 program allows you to finance renovations or improvements to an existing property.
The 504 can be used for the purchase (or refinance) and construction of improvements to an existing building or property in one transaction. Refinances are currently available, but somewhat limited and we are currently awaiting final word from the SBA regarding what will be allowed with a 504 refinance as announced as part of the Economic Stimulus.
The 504 Retrofit for Commercial Property
The 504 is an ideal program if you want to purchase a building that is not right for your business and you want to remodel, expand or convert it to make it right for your business.
The 504 loan not only allows you to do a purchase-renovation, but it also allows a 90% loan to cost purchase and renovation since you can roll in most closing and soft costs - appraisal, attorneys fees, engineering reports, title insurance, etc. This affords you more leverage than most, if not all, other conventional commercial loans.
Green Commercial Renovation Loans up to $10 million+
A commercial renovation is also a good time to take advantage of the 504 program's green energy benefits as well.
If you are able to reduce the energy costs for the newly renovated property by as little as 10% you can qualify for a larger loan. This makes the 504 ideal for manufacturing and industrial facilities, hotels, motels and other businesses that want to realize the financial benefits of "going green" while having less of an impact on the environment.
To qualify for these larger loan amounts your building would have to be one of the following:
- efficient enough to reduce energy costs by 10%
- an energy producing facility
- a manufacturing facility - green or non-green
Please see the following pages for more info about how the 504 works:
The green energy benefits of the SBA 504 currently allow a healthy, growing business to finance up to 90% of the cost of a purchase and renovation at low rates with a long term amortization of 20 to 25 years.
Tax Incentives
Another major benefit to the program are the tax incentives of going green since most states and the Federal Government offer significant tax incentives for incorporating the use of renewable or alternative energy in a commercial building.
Considering the amount of existing commercial property available at low prices this might be an ideal time to find a building in the right location for your business and modernize or remodel it to fit your business and maybe even "go green."
Please contact us at 1-800-414-5285 to see if the commercial renovation loan could work for you.
