Small Businesses Opting for More Space or Investing in Their Own Property

September 19, 2010

According to the U.S. Small Business Administration (SBA), more than 680 small businesses benefited from very low interest rates in September and looked to the 504 loan program to purchase commercial real estate, expensive equipment, and machinery. The interest rates for both 20-year and 10-year SBA loans fell to their lowest levels since the program’s inception.

According to the U.S. Small Business Administration (SBA), more than 680 small businesses benefited from very low interest rates in September and looked to the 504 loan program to purchase commercial real estate, expensive equipment, and machinery. The interest rates for both 20-year and 10-year SBA loans fell to their lowest levels since the program’s inception.

Certified Development Companies (CDCs), the SBA’s conduit for providing 504 loans, have been busy working with small business borrowers seeking to take advantage of the low interest rates. The special small business loans are being used for a variety of needs. Most businesses just need more space, some lost their leases and decided to invest in their own property, while others want to construct new green facilities incorporating energy-efficient technology.

For example, Paragon Innovations, in Richardson, Texas, was able to move out of leased space into an 18,600-square-foot building the company had purchased using an SBA 504 loan. The move enabled the technology design company to lock in its occupancy costs and build equity in its own building.

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