Commercial Loans Blog

SBA Loans Put on Hold By Government Shutdown

Posted by George Blackburne on Mon, Oct 7, 2013

Do you need an SBA loan to buy or refinance a commercial property?  If so, you may not be able to rely on your local SBA lender.  Perhaps an inexpensive bridge loan from Blackburne & Sons, one of the oldest private money commercial lenders in the country, would help.

Apply For a Commercial Loan to Blackburne & Sons

Our friends at ValuExpress recently explained the problem to us:

"It’s October 1 and through failure of Congress to enact a fiscal budget or a continuing resolution to authorize federal spending, all parts of the federal government not deemed “essential” halted operations effective midnight last night."  This includes SBA loans and the SBA!

"According to Bloomberg BusinessWeek’s account regarding the first federal government shutdown in 17 years, about 800,000 government workers are being furloughed. In addition, funding is suspended for a wide array of services, including contracts that government agencies award to small business owners."

"This means that financing for small businesses will be significantly impaired. The Small Business Administration (SBA), which guarantees tens of billions in loans for tens of thousands of entrepreneurs annually, has furloughed about 62% of its 3,500 workers, according to its response to the threatened shutdown posted on the SBA website last week."

Submit Your Loan to 750 CommercialLender

"SBA lenders have been here before, but this situation is not nearly as disruptive as the annual 7(a) subsidy fights that Congress went through prior to 2004, which shut down the entire loan program three times in 1995 alone."

“The SBA shutdown is definitely a bummer for us as we have a $5-million SBA 7(a) loan closing in process with our affiliate, Country Bank and we are not sure if we can close the loan because we need the SBA to sign off on the Environmental Site Assessment (ESA) for the project,” commented Jim Brett, the ValueXpress underwriter on the project."

Our thanks for this heads-up go out to ValuExpress, one of the few commercial loan conduits to survive the Great Recession.  They're good folks.

Where does this leave you if you have an SBA loan in process?  If your seller has a competing offer circling your target property, or if you need a commercial loan right away to keep your company doors open, you should apply immediately to a private money commercial lender. At Blackburne & Sons, We make bridge loans, commercial loans, and permanent loans, up to $2.5 million, on commercial properties nationwide, owner-occupied or not.

A private money commerecial lender can typically approve your commercial loan within just 24 to 48 hours.  At Blackburne & Sons we can even give you a commercial bridge loan with no prepayment penalty, so the moment the SBA re-opens its doors and starts guaranteeing SBA loans again, you can immediately close your SBA loan and pay us off.

Private money commercial lenders, like us, will often allow junior financing.  What this means is that a private commercial lender - unlike most commercial banks - will allow the seller to carry-back a second mortgage behind their first mortgage.  In a rush situation, this extra flexibilty from your commercial lender could save your deal ... or even your company.

Remember, the SBA does not actually make commercial loans.  Instead, it merely guarantees a portion of them.  Your bank may still legally be able to make you a commercial loan today, but they will probably insist on a written commitment from the SBA to partially-guarantee your commercial loan first.  As long as the SBA is shut down, such loan guarantees will not be forthcoming.  

Consider a private money commercial loan instead. 

Apply For a Commercial Loan to Blackburne & Sons

If you need a commercial loan larger than $2.5 million, please apply by clicking the red button below:

Submit Your Loan to 750 CommercialLender

Topics: SBA loans