Government programs can make getting funding easier for some business owners, but they don’t work in every situation. If you’ve been looking at an SBA 504 loan, but don’t qualify, Texas Hard Money Lenders can still help.
Before getting into how Texas Hard Money Lenders work, and how they can help, let’s explore the SBA 504 loan. This is one of many programs offered by the government, namely the Small Business Association (SBA), and it’s specifically designed to help business owners. The loans can only be used on fixed assets, such as buying land, construction, improving a property, purchasing equipment, and refinancing debt that was generated as the result of purchasing a fixed asset. They cannot be used toward things like rental or speculative properties, marketing expenses, materials, or held as working capital.
The way financing works under this program, the business owner typically provides 10% of the money needed, a bank provides 50%, and a community development company (CDC) provides the other 40%. CDCs are non-profit organizations certified by the SBA. There are hundreds of them throughout the country.
This loan program exists to spur economic growth and create new jobs. Ergo, your business cannot be worth more than $15 million, you cannot have earned more than an average of $5 million in either of the two years prior to your application, and the project size must be greater than your personal assets. There are further stipulations too. For example, you need to plan to occupy the space at least 51% of the time and you (as the business owner) must be a US citizen or permanent resident or the majority of your company must be held by Americans/ permanent residents. Having good credit is typically required as well.
The Regulations Associated with the SBA 504 Loan Disqualify Many Business Owners
Even though the SBA 504 loan helps many business owners, it doesn’t work for those who need cash for fix-and-flips, those who want to use their property as a rental, or those who work in specific industries, like cannabis. Furthermore, it doesn’t work for new immigrants or those hoping to invest in American land from overseas, and people with rotten credit are disqualified too. However, if an SBA 504 loan doesn’t work for you, you can still get help from Texas Hard Money Lenders.
Increase your eligibility for a loan by talking to an HML broker.
At the end of the day, Texas Hard Money Lenders don’t care if you’re an American or not. You can qualify even if you have rotten credit. It doesn’t matter if you earned $50,000 last year or $50 million. You can use the funds toward the purchase of properties you plan to rent out and toward speculative properties. Why is this? In short, they care more about the value of the property you’re purchasing and your ability to generate profit than anything else. If you’re one of the many who don’t fit in the SBA 504 box, speak with a broker about alternative lending options.
Level 4 Funding LLC
Hard Money Lender
Hard Money Loans
Hard Money Loan
Arizona Tel: (623) 582-4444
Texas Tel: (512) 516-1177
Dennis Dahlberg Broker/RI/CEO
NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027
111 Congress Ave | Austin | Texas | 78701
About the Author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true. Dennis has been married to his wonderful wife for 43 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.