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Updated over 1 year ago on . Most recent reply

User Stats

56
Posts
8
Votes
Menachem Krasnjanski
  • Rental Property Investor
  • Spring Valley, NY (spring valley ny)
8
Votes |
56
Posts

SBA 7(a) financing for a property

Menachem Krasnjanski
  • Rental Property Investor
  • Spring Valley, NY (spring valley ny)
Posted

My partners and I have been trying to get financing for a 55 room motel for a couple of months, but many of the banks are hesitant about lending now. We found a bank that was willing to set us up with a SBA 7(a) loan that would require very little down and would have a very low prepayment penalty. The rate is prime plus 1.75 percent (prime is currently 8 percent which we cashflow fine at) and adjusts quarterly. One of my partners is concerned that with the current economic climate the rates may go up to 11, 12, or 13 percent (or more...) which would cut heavily into cashflow and severely diminish our returns. Should we have such a concern?

  • Menachem Krasnjanski
  • Loading replies...