Finalizing a Small Business Administration loan (SBA loan) and refinancing an SBA loan can frequently be among the most difficult commercial mortgage and business financing circumstances for a business borrower. There are successful business loan strategies for both SBA loan situations.

How Difficult Are SBA Loan and Commercial Mortgage Programs?

There are usually two schools of thought about getting an SBA loan to buy a business: (1) Avoid an SBA loan at all costs. (2) Use an SBA loan whenever possible. These conflicting viewpoints are due to a commercial mortgage business loan process that is perceived as complex and difficult by many commercial borrowers.

Despite the negative atmosphere surrounding the SBA loan process, it can be worth the time and effort for many borrowers. There are critical business financing and commercial real estate loan obstacles to avoid with an SBA loan, and there is only a small number of capable lenders in this demanding commercial mortgage and working capital area. It is vital for a successful SBA loan program to involve an SBA loan advisor that is skilled at this rigorous business loan system.

Is It Feasible to Refinance an SBA Loan?

Historically it has been difficult to refinance an SBA loan. It is now more practical to refinance an SBA loan using specialized business financing programs. With these new refinancing strategies, it is more practical to obtain SBA loan refinancing than it was previously.

Future planning for business financing can eliminate many SBA loan refinancing difficulties. If the original business loan can be finalized without including an SBA loan, future business refinancing will be more viable. Borrowers should determine if the initial commercial mortgage truly must include an SBA loan.

Obtaining an SBA Loan - Two Common Business Financing Misunderstandings

One of the prevailing views of an SBA loan program concerns the documentation needed to finish the commercial mortgage requirements. The key to a successful SBA loan process is trusting the SBA loan facilitator about what is required. What business borrowers should try to realize before becoming frustrated by the SBA loan process is that any commercial loan process will include substantial paperwork whether an SBA loan is involved or not.

Beyond the paperwork concerns, a more critical and real problem is working with an SBA lender that is not very good at successfully completing SBA loan requirements. Even though there are many commercial lenders that publicize their ability to process an SBA loan, in reality there are very few lenders nationwide who are consistently successful at completing the SBA loan process in a timely manner.

Alternatives to SBA Loan Financing - Conventional Business Loan Options

Conventional business financing options should always be considered simultaneously with the possibility of obtaining an SBA loan. As noted above, the feasibility of refinancing a business loan in the future will depend heavily on the choices made by a commercial borrower when obtaining the initial commercial mortgage.

A conventional business loan might be more feasible than many borrowers realize. The possibility of refinancing either an SBA loan or conventional business financing will ultimately be more practical and successful when working with a skilled commercial mortgage advisor and commercial lender.

Copyright 1995-2007 AEX Commercial Financing Group and Stephen Bush. All Rights Reserved.

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