A Bridge to Success through Short-Term Financing

Originally published on Scotsman Guide

With recent rent and sales-price growth in multifamily housing and other commercial real estate sectors, mortgage brokers and lenders should be paying more attention to the use of bridge loans to help clients in need of short-term financing. Clients use bridge loans to support a project until they can secure permanent financing.

Also known as gap financing or interim financing, these types of short-term loans are popular with clients who are looking to quickly close property acquisitions and execute value-add business plans. These types of loans are often interim financing vehicles for multifamily homes or other commercial-property acquisitions.

Occasionally, such loans are used for cash-out refinance purposes, with the money going for rehabilitations or renovations, lease-ups or interest reserves. With quick closing periods and one- to three-year terms, bridge loans provide temporary financing until the borrower secures a permanent takeout loan with an agency, a bank, a commercial mortgage-backed securities lender or even the U.S. Small Business Administration (SBA).

As mentioned above, a main use for the loan is to put additional funds into rehabilitations and renovations. This allows property owners to raise rents, maximize proceeds and increase bottom-line cash flow which, in turn, increases a property’s overall value. Property owners or investors can then secure permanent financing at the new valuation and pull more cash out when they refinance out of their bridge loans.

Faster service

Bridge loans have advantages over various loan programs from agencies such as Fannie Mae and Freddie Mac, the SBA and the U.S. Department of Housing and Urban Development (HUD). There may be a variety of situations that necessitate a quick closing, such as a hard deadline or a competitive bidding situation. A bridge loan may close in only a few days or weeks.

Conversely, the lengthy timelines and requirements for loan approvals from groups such as HUD and SBA can impede the timing of transactions. An SBA loan can take up to three months or longer to be approved while some HUD loans can take five months or more. A borrower also may encounter unexpected delays during the permanent loan approval process, which may result from issues with the property title, structural problems, environmental concerns or financial-performance issues.

These are some of the reasons why bridge loans may make sense for clients of commercial mortgage brokers. There are two types of bridge loans that are well suited to meet current market demands, particularly for smaller-balance real estate that is too small for debt funds or other institutional lenders.

First, non-recourse bridge loans are a popular option for properties with some in-place cash flow. These loans require no personal guarantee (other than for so-called “bad boy” acts in which a party prior to closing willfully took part in intentional misconduct). Such loans can allow up to 20% cash out for improvements. Pricing typically starts at the prime interest rate plus 395 basis points, with a loan-to-cost (LTC) ratio as high as 80%.

Second, so-called “performance” bridge loans may be a better fit for quick-close deals or heavier-lift properties that don’t have in-place cash flows. These types of bridge loans can be used for acquisitions, rehabs, refinances and stabilization efforts, with up to 50% available for construction expenses. Pricing typically starts at 5.99% with up to 75% LTC.

Although bridge loans have many benefits, there are some important risks and potential drawbacks for borrowers to consider. Bridge loans typically have higher interest rates than other types of financing. They also are subject to floating rates, which are currently on the rise. For properties that experience a decrease in rent-growth rates, valuations level out after a period of increases. Additionally, lenders generally require strong credit and a certain level of in-place cash flow. If the borrower is unable to repay the bridge loan, the lender may be able to foreclose on the property used to secure the loan.

Bridging sectors

These types of loans play critical roles in the multifamily housing market, which many experts believe is poised for continued growth in 2022. For instance, Freddie Mac estimates 4% multifamily rent growth across all markets this year. The organization also expects to see overall multifamily origination volume to continue rising.

With rents continuing to climb and interest rates remaining low — but trending upward — investors will want to strike while the iron is hot. Bridge loans can close in less than 30 days, even before the next forecast rise in rates. At the same time, they allow multifamily investors to execute rehab and value-add plans for capitalizing on rent growth.

In addition to multifamily housing, the self-storage, health care and hospitality sectors also may benefit from bridge lending. While many industries have struggled due to COVID-19 cases, self storage has grown as more people transition to remote work or downsize their homes. According to StorageCafe.com, about 53 million square feet of rentable storage space was completed in 2021 alone. As a result, investors are gravitating toward self-storage deals to expand or improve existing operations. Bridge loans provide a deal structure that allows for quick execution, offering advantages for investors.

While the self-storage and multifamily housing markets are on the rise, the health care and hospitality industries are still recovering. There are distressed assets in these sectors that need short-term capital influxes to restore operations. With bridge loans, these businesses can make improvements and stabilize cash flows.

Bridge loans can be a valuable solution when lenders and brokers are discussing investment financing options with their clients. Quick closings, flexibility and non-recourse provisions can fit a variety of business-use cases and provide an influx of cash.

Partnering with an experienced bridge lender can help clients find competitive pricing and attractive deal structures. Select lenders will pay a fee to their referral sources on closed deals. Lenders and brokers should act quickly if their clients meet the requirements for a bridge loan. There’s no better time than now to take advantage as rates begin to rise.


The State of the Warehouse and Industrial Real Estate Market

Originally published on Supply Chain Brain

Alex Cohen, chief executive officer of Liberty SBF, reviews current trends in demand for warehouse and industrial space, and how owners are acquiring financing in difficult times.

Demand for warehouse and industrial space remains robust across the country, with continued rent growth and higher prices per square foot, says Cohen. The capacity crunch has been driven by the fallout from COVID-19, as well as a general rise in e-commerce activity over the past few years and resulting supply chain congestion.

The situation is especially acute near major port areas, such as Southern California’s Inland Empire region, which supports the ports of Los Angeles and Long Beach. The same is true for parts of the country that are close to ports along the East Coast.

Cohen sees a shift in the dynamic between end-users of industrial properties and real-estate investors, with the latter beginning to eclipse the former in bidding for space.

A further trend in the market is the changing nature of the warehouse itself. In addition to the traditional regional distribution center, which might take up a million square feet or more, there’s growing demand for smaller facilities located closer to urban centers. That’s another result of the e-commerce boom, as retailers look to meet customer demands for rapid delivery of orders.

At the same time, says Cohen, many developers are reducing the portion of their properties devoted to office space and increasing that which is intended for warehousing and distribution use.

Opportunities also exist to convert retail properties into warehouse complexes in major metropolitan corridors, even to the extent of turning entire department stores or malls into distribution centers. But developers can run into re-zoning problems as they confront issues of traffic, congestion and noise close to residential neighborhoods.

Watch the 5-minute video here.


Increase to the Consumer Price Index Spells Inevitable Rate Hikes in 2022

Originally published on MPA Mag

One indicator that helps to predict the mortgage narrative is the consumer price index (CPI). Acting as a financial barometer of the inflationary climate, commercial mortgage lenders like to keep their eye on any changes to this inflationary measure.

With changes to the CPI, changes to lending rates will likely follow.

This year many in the commercial mortgage sector are in for a shock. At 6.8%, the CPI annualized increase represents its highest jump since 1982.

The lending goalposts are already moving to accommodate the almost certain rate increases predicted in 2022 based largely on this inflationary index.

Along with the CPI increase, commercial lenders are bracing for anticipated changes to the overnight rate dictated by the Federal Reserve. Any change in the overnight lending rate will directly impact floating rates on all commercial loan arrangements.

There are other inflationary pressures at play that are causing a domino effect. Inflationary indicators today lead to rate changes down the mortgage road. 

Liberty SBF and many US-based commercial lenders are waking up to the CPI news with the realization that it is more than likely that the historically low rates that we have seen up until now will not stay this low forever.

As a result, Alex Cohen, CEO of Liberty SBF, is of the view that steps should be taken in the short term to help buffer clients against any potential new year mortgage rate increases fuelled by converging inflationary factors. 

“I think that the inflationary pressures we face are very timely. The number that just came out is certainly a big one. We still must think that we are at the peak of the supply chain disruption. The costs of goods in the US are going up and the energy prices have gone up too,” Cohen pointed out.

While the CPI has been influenced by unique supply chain disruptions including backups at major US ports, the supply issues need to be corrected before there is any relief. Cohen predicts that we will not see this happen until well into 2022. 

Lending Solutions

Providing possible answers, Liberty SBF is in the unique position of being able to work with the Government-sponsored Small Business Association (SBA), which means the lender can use this partnership to offer flexible loan options when floating rates start to rise.

Cohen and Liberty SBF are encouraging borrowers and investors to switch to Government-sponsored SBA fixed-rate loan options now, ahead of the predicted new year rate hikes. To achieve this seamlessly, Liberty SBF has set up a team to work with commercial real estate investors when refinancing into these low fixed-rate mortgage options.

“We are identifying borrowers now who can refinance when we are at the bottom of the rate cycle. We need to take advantage of this opportunity before the rates go up,” Cohen explained.

He went on to outline that “the SBA subsidizes two types of loan programs. One is called 7a and the other is called the 504. A lot of borrowers use 7a loans which are floating-rate loan options to build properties and, until recently, didn’t have the option for refinancing because they used a subsidized high-leverage loan.”

That was then and this is now. Cohen pointed out that, thanks to a recently passed Government rule change, commercial investors and real estate borrowers can now “refinance SBA debt into SBA debt”.

Cohen is excited about what this recent lending announcement represents for Liberty SBF and its commercial clients.

“We are reaching out to borrowers who currently have these floating rate SBA loans backed by real estate and providing them with some real options,” he said. “They can now refinance into a low fixed rate 504 option. We can secure for them a lower rate and if there is significant equity in their property, then a cash-out is typically on the table.”

This is welcome news for some of the clients that Liberty SBF works with that have built up considerable equity in their existing high-leverage loans.

“We are typically targeting borrowers who have been in their existing mortgages for three-plus years. These clients are successfully executing their construction plan and have completed a lease plan, and this builds significant equity value,” Cohen said.

New year commercial prospects

Despite recent financial indicators, Cohen continues to remain cautiously optimistic about commercial lending prospects leading into 2022. Other factors enter the mortgage game plan that go beyond anticipated rate changes and inflationary predictors.“

We are still seeing major rent growth moving into 2022 and demand for multifamily and single-family residential construction. We believe that the commercial construction market will remain strong,” Cohen predicted.

“Inflation is not the only input. We are still at all-time low rates and supply and demand factors are at play. We are very optimistic about the next couple of years. The macroeconomic shift may have caused folks to get a little bit more disciplined. If the market takes a disciplined approach, then there is certainly a lot of value yet to be created over the next two or three years.”


Finding a Sweet Spot in Middle Market Assets

Originally featured on Globe St

“We do not want to compete with institutional market. We are supporting emerging sponsors. That is the business that we know and that is the business that we are good at,” says Alex Cohen, CEO of Liberty SBF, in this podcast interview. Liberty SBF is an active bridge lender, operating in the $5 million to $15 million price range across asset classes, which has been a sweet spot for the firm. 

Like many lenders, the firm focused on PPP and other essential loans, but now that the pandemic has started to retreat, the firm is returning to its core business model, where bridge loans are at the epicenter. With so much capital chasing deals, there is plenty of demand. “We reverted back to our core lending platform in the late summer early fall, and we have just seen robust demand.”

Liberty SBF has a non-recourse bridge loan, which is in high demand. The firm takes a thorough look at the business plan, and is particularly attracted to deals that Cohen says require a ”heavy lift” meaning that they  require a more involved renovation and a significant capital budget. 

In an exclusive podcast interview on Globe St, Cohen tells all about the firm’s bridge lending activity, and why he is so bullish on the sector. Listen now.


Strong Fundamentals for Commercial Real Estate, New & Enhanced Loan Products Emerge

Originally published on MPA Mag

Late July brought significant change to the commercial lending space with a highly impactful announcement by the Small Business Administration (SBA).

For the first time, the SBA announced the opportunity to refinance 7a loans into 504 loans. Commercial real estate investors often utilize high-leverage, floating-rate SBA 7a loans to finance construction projects but find themselves without an easy exit strategy.

This rule change enables borrowers to refinance into an SBA 504, another high-leverage, government-guaranteed loan with a low fixed rate. Refinancing can potentially save thousands of dollars on interest, plus allows cash-out for working capital.

For Liberty SBF, the proposed changes were welcome news. With a client base made up of investors and businesses eager to refinance out of SBA 7a loans into low-cost, fixed-rate SBA 504 loans, this change has opened more doors for potential borrowers as well as generated a great deal of interest and direct referrals from brokers in the mortgage community.

“This is a really big deal. Any borrower in that high leverage (SBA 7a) loan should be thinking of refinancing, because theoretically there should be very little out-of-pocket expense. Most of the fees can be capitalized into the new loan,” Alex Cohen (pictured), chief executive officer of Liberty SBF, explained.

“Brokers and mortgage professionals who work as intermediaries should be thinking about their 7a clients who can now refinance into high-leverage, fixed-rate SBA 504 loans. We believe that this is a total of around $100 billion to $200 billion in outstanding volume,” Cohen continued.

Liberty SBF hit the ground running in anticipation of the SBA announcement. To capitalize on the significant change for high-leverage small business loans, Liberty SBF set up a team dedicated to pursuing this opportunity and have been growing this team over the month since the proposed change took effect.

How has the announcement panned out so far? “We have already been successful in signing up several deals. We are working with a lot of referral sources in the mortgage community that send us transactions. It has been a big deal for them,” Cohen stated.

Liberty SBF has also introduced additional bridge and construction options to participants in the mortgage industry with the launch of a bridge loan platform.

On the heels of such welcome news in the commercial lending space, Liberty SBF is now able to offer its client base a new bridge loan option that is generating buzz in the industry.

“This second loan appeals to institutional investors. Debt funds and institutional lenders typically do not lend below $10 million or $15 million per transaction. With our bridge option, we will go down to $5 million. We can now offer a low interest rate for deals between $5 million and $15 million that have in-place cash flow,” Cohen stated.

Cohen further explains that Liberty SBF can offer two options: a “heavy lift” bridge loan, which is geared toward construction for borrowers with less in-place cash flow, and a “light lift” bridge loan, which suits projects with more in-place cash flow and offers the most competitive non-recourse pricing available on the market.

Aside from the ability to go down to the $5 million mark, what other advantages does this bridge loan carry?

Cohen doesn’t hesitate to answer. “It is low-cost, high-leverage, and non-recourse.”

In simple terms, Cohen explains that Liberty keeps a competitive edge by offering lower rates, which range from 5-6%. Additionally, the loan-to-cost ratio can be as high as 80% and the borrower is not personally liable aside from fraud (the collateral for the loan is the property, not the borrower).

What is down the road for commercial lending?

With new construction not expected to slow down any time soon, the odds are in the commercial lending space’s favor.

“We feel that there are strong fundamentals for commercial real estate. There are a lot more people than housing and apartments in most markets across the country. Over the next two to three years, we will be watching rates very carefully. If there is an opportunity to refinance at a fixed rate, now is the time to do it because we are at the bottom of the rate cycle,” Cohen explained.

Cohen added: “We are bullish in the one-to-15-million-dollar space, which is the size we play in and eligibility for these loan products. Both are predicated on a resilient real estate market.”


Top 5 SBA 504 Myths Exposed

Many business owners have the idea that Small Business Administration loans are difficult to get, take a long time to close, and they’re not worth the effort. This misunderstanding comes mainly from borrowers who went through the process with lenders that do not make SBA 504 loans regularly who get tripped up by loan regulations and procedures they’re unfamiliar with. They don’t understand the loan process and infrequently work with the SBA, causing undo difficulties.

A preferred lender like Liberty SBF can guide borrowers through the process seamlessly and we know how to anticipate problems before they come up. We’ve heard all the reasons why small business owners shy away from going with an SBA 504 loan. Below we dispel the most common myths.

TOP 5 SBA 504 Myths

1. Too Long and Cumbersome

This is probably the most common misconception about SBA 504 loans. Much of it comes from the fact that the SBA requires a lot of documents from the business owner. Loan processors at Liberty SBF know exactly what is needed to underwrite the loan, usually the same exact documentation required by a conventional commercial property loan. As a preferred lender, we know exactly how to structure a loan package. We work with all parties to expedite the loan to closing quickly and efficiently.

2. Property Needs to be 100% Occupied by Owner

SBA 504 loans are more flexible in occupancy requirements than you might think. Most borrowers think they have to occupy the entirety of the property’s square footage to qualify. And while most small businesses will, there are cases where a portion of the property is rented out. In order to qualify for an SBA 504 loan, the business must occupy at least 51% of the property, leaving the rets to be leased out to another business giving the owner another source of revenue.

3. It’s Only for Mom & Pops or Startups

Actually, it’s the opposite. While many Mom & Pop type business can get an SBA 504 loan, most of these businesses are middle or larger sized companies with multiple employees. From Main Street to Middle America, small businesses across the country can get an SBA 504 loan. Liberty SBF frequently funds SBA 504 loans anywhere from $1 to $10 million in industries as varied as assisted living facilities and warehouses to self-storage facilities and schools.

4. It’s a Loan of Last Resort

Many people think that after a borrower has been turned down by for a bank loan they have to go to the government with hat in hands for a loan as a last resort. Again, for most small businesses this is the exact opposite of what should happen. Any business owner with good credit and at least three year’s operating history should apply for an SBA 504 loan first when purchasing a commercial property. The terms are much more favorable than any other small business loan you will find anywhere. Low, long term rates and up to 90% loan-to-value help small business owners save cash for operating expenses.

5. SBA Lends the Money

The Federal Government does not put up the money for an SBA 504 loan, so the taxpayers do not fund small businesses who want to purchase a property. An SBA 504 loan has three parts. If you’ve ever taken a home mortgage and a home equity loan, then you can easily understand how an SBA 504 loan works and how it can provide up to 90% LTV financing. A first lien loan of 50% LTV is provided by a bank or a direct non-bank lender like Liberty SBF. The second lien of up to 40% is provided by a secondary institution called a Certified Development Company (CDC). A CDC is a non-profit certified and regulated by the SBA that promotes economic development within their communities, which includes funding second lien SBA 504 loans. While the money is not provided by the SBA, the CDC portion of SBA 504 loans are guaranteed by the U.S. Government. CDCs work together with participating lenders Like Liberty SBF. Since the SBA 504 loan program launched in 1958 it has been self-funded and hasn’t cost the taxpayers any money in its mission to help U.S. small business owners grow their businesses.

Liberty Small Business Financial Authorized SBA 504 Lender

Liberty SBF is a mission-based lender that provides capital through the SBA programs at a low cost to borrowers. Since its inception ten years ago, Liberty SBF has participated in more than $2 billion in transactions involving SBA programs.

Are you looking for an SBA 504 loan? Begin your loan application with Liberty SBF today!


SBA 504 Borrowers: Get 6 Months of Payment Forgiveness Through Covid-19 Relief Act

The Economic Aid to Hard-Hit Small Businesses, Nonprofits, and Venues Act (Economic Aid Act) provides $3.5 billion in additional Covid-19 relief, some of which is authorized for use through the SBA 504 loan program for both existing borrowers and on newly originated loans to help small business owners during the pandemic.

New SBA 504 Loan Relief

The SBA 504 Loan has been made even more attractive to new small business borrowers. For all loans approved from February 1 until September 30, 2021, the SBA will subsidize the first 6 months of principal, interest, and any associated fees starting with the first payment. Borrowers need not apply for this assistance.  The SBA provides this assistance automatically and is capped at $9,000 per loan per month.

Relief for 2020 SBA 504 Borrowers

The Small Business Administration was authorized by the Economic Aid Act to pay 6 months of principal, interest, and any associated fees that borrowers owe for all 504 loans approved up to September 27, 2020 even if not fully disbursed and existing loans that are in in regular servicing status.

SBA 504 Loan NOT Eligible for Relief

According to SBA guidance, unfortunately, loans approved during the period beginning on September 28, 2020 and ending on January 31, 2021 are not eligible to receive any payment relief.

Apply for an SBA 504 loan

SBA Fees Eliminated

Alejandro Buitrago, Vice President and Business Development Officer at Florida First Capital Finance Corporation has been parsing through the new legislation. According to Buitrago, for any SBA 504 Loans approved between December 27, 2020 and September 30, 2021; the following fees will be eliminated:

  • 5% of the 1st Mortgage (aka TPL Fee)
  • 5% of the Interim Loan (aka CDC Processing Fee in the debenture)

To illustrate, here is what fees would be eliminated on a standard $1,000,000 Project being financed at 90%

  • Fee Elimination 1st Mortgage: $2,500
  • Fee Elimination Interim Loan: $6,000
  • Total Fee Elimination: $8,500

Some debenture fees remain in the equivalent of 1.15% of the Interim Loan In the above scenario the SBA Debenture Fees would total: $4,600, reducing the SBA Fees from $13,100 to $4,600 on a $1,000,000 project, a 65% decrease in costs.

Apply for an SBA 504 loan.

Liberty SBF is Your Connection to SBA

Covid-19 is still adversely affecting thousands of small businesses across the country and the SBA’s lending programs are key tools in the Federal Government’s economic stimulus efforts. Liberty SBF, one of the largest SBA 504 lenders in the country, is helping small businesses connect with the SBA to take advantage of stimulus relief through Paycheck Protection Program and the SBA 504 loans.

Small business owners positioned to acquire a new property to expand their businesses right now need to finance their expansion through the SBA 504 loan program, which already offers the best terms for borrowers out of any commercial property loan: low, long-term rates starting at 3.99%, with up to 90% loan-to-value financing. Small business owners who already operate out of their own commercial property can tap into their equity at similarly favorable terms through an SBA 504 refinance. Both borrowers will get to take advantage of new SBA 504 loan relief in the Economic Aid Act.

As always, please refer to SBA Procedural Notice 5000-20079 for complete guidance on SBA 504 loan relief in 2021.

Contact Liberty SBF about SBA 504 loans.


We never stopped lending! Liberty SBF closes $350 million in loans in first half of 2020.

Liberty SBF Holdings LLC, a small balance commercial real estate lender, is excited to announce it has closed $350 million in loans in the first half of 2020. The company, which provides SBA and conventional loans for industrial, storage, office, and healthcare properties, is now relaunching its bridge lending platform to provide short-term financing for multifamily and commercial properties from $1-$10 million.

“Liberty SBF took a disciplined credit approach during the last cycle,” said Alexander Cohen, CEO. “When COVID-19 hit in March we avoided margin calls and poor asset performance, which sidelined other lenders, and we were able to execute for our borrowers and referral sources through the first half of the year.”

The company also announced it has promoted Varan Rakhra to lead its national loan origination efforts as Director of Sales & Business Development. Mr. Rakhra’s team of lenders is eager to consider opportunities nationwide.

“Borrowers want to capitalize on historically low rates and they want to acquire properties at discounted prices,” said Mr. Rakhra. “Liberty SBF never stopped lending so we can provide capital right now.”

Liberty SBF Commercial Property Loan Funding

Liberty Small Business Financial provides up to 90 percent loan to value (LTV) financing through the SBA 504 program. SBA rates have dropped to historic lows, recently touching 2.25% for a 25-year fixed rate. For investors seeking bridge loans, Liberty SBF provides financing up to 65% LTV. Liberty is writing loans from $1 to $10 million. Hospitality properties are not currently eligible for loans through Liberty SBF.

Liberty SBF was founded in 2011 and has closed more than $1 billion in commercial real estate loans since its inception nearly 10 years ago.

Backed by some of the nation’s leading private equity firms, Liberty SBF has an innovative platform incorporating predictive intelligence and superior technology. For more information, visit LibertySBF.com.



What Does “Owner-Occupied” Mean in Commercial Real Estate?

owner occupied real estate loans

The concept of owner-occupied commercial real estate – also known as owner-user commercial real estate – is key to understanding lending options to finance a new property for a business. The financial upsides of owning versus renting are many. An owner will build equity with every mortgage payment and asset appreciation increases value in the property over time.

But, just running a business out of a property does not automatically make it eligible for SBA 504 financing from Liberty SBF. In addition, the owner must occupy more than half—51% or more—of the building’s leasable space for the purposes of running their own business. A business that has the same ownership as a holding company that owns the property is also considered owner-occupied.

In this case, the borrower is eligible for a US government-backed SBA 504 loan that gives you access to better financing than any other option.

But what happens if you still need a loan but do not expect to occupy more than half of the available square footage of the commercial property

Liberty SBF’s Conventional loan is a great alternative. Our Conventional loans allow occupancy of the borrower’s business to be as little as 30% of the total square footage of the commercial property.

Asset types that qualify for owner-occupied financing include industrial buildings, flex, retail, office properties, and professional medical offices.

Special-use properties such as self-storage, assisted living facilities/skilled nursing facilities and other healthcare properties, day care, sports facilities, and event centers also qualify. A multifamily property is not eligible for owner-occupied financing, but mixed-use buildings and hotels do qualify. Learn more about hotel property loans.

In 2010, the SBA deemed some businesses with rental income – also called passive income – eligible for its programs. This gave self-storage operators the opportunity to take advantage of the SBA 504 loan’s many benefits. Read more about self-storage facility financing.

The SBA 504 loan provides small businesses that will be owner-occupiers access to the same type of long-term, fixed-rate financing enjoyed by larger firms. Interest rates are equivalent to favorable bond market rates. You qualify for the loan program when you have sufficient liquidity and net worth, and plan to occupy more than 51% of the facility you are purchasing for SBA 504 loans or 30% for Conventional financing.

As an owner-user, you are considered to be a lower risk for the lender, who is assured that you will be committed to the property both as landlord and as chief occupant.

Liberty SBF is a specialist in SBA 504 and Conventional loans. We believe that our owner-occupied loan programs have advantages that no other loan can equal, including:

  • Up to 90% LTV (loan-to-value ratio) financing,
  • Low fixed rates, and
  • Terms up to 25-years

Interest rates are low today, and now is the time to lock in your fixed-rate commercial real estate loan. When you work with an experienced lender like Liberty SBF, you can be confident that we will anticipate any problems and help you overcome any potential obstacles.

We can get the job done in 45 days or less. Contact us today.


Fixed-Rate CRE Loans at All-Time Low | 25 Yr Fixed | Now 3.63%

Debenture rates for SBA 504 loans have dropped below 4% this month, reaching all-time lows.

 SBA 504 Loan Rates:

  • 25 Year Effective Rate: 3.63%
  • 20 Year Effective Rate: 3.53%
  • 10 Year Effective Rate: 3.92%

Financing available for owner user industrial, owner user office, healthcare, self-storage, and hospitality properties.

Earn up to 2 points paid at closing by Liberty SBF

  • Up to 90% LTV
  • Long-term, low fixed rates
  • Close in 45-60 days!

Get Your Deal Quoted!


10 Articles About CRE From Liberty SBF

Liberty SBF has become a thought leader in commercial real estate finance with articles published online and in major industry media outlets. Below are 10 articles published by Liberty SBF or in influential publications with the company’s input.

1) Non-Bank Lending Is the Solution for Small Business CRE Loans

Strong demand for capital in the commercial real estate sector is expected to continue for the foreseeable future. Historically low interest rates, a robust economy, and strong employment numbers are boosting a surge in CRE demand across the country. People might assume that all commercial real estate lenders are alike, but there are many types of financial institutions that work with CRE borrowers.

What is a non-bank lender and how is it different?

2) Think Retail is Dead? Think Again!

Despite what you might be hearing in the news, in today’s strong economy, retail trade continues to grow. April 2019 saw a year-over-year 3.1 percent increase in US retail sales

Find out how business owners can thrive in the new retail ecosystem especially with an SBA 504 loan.

3) Green Office Properties & the SBA 504 Loan

When you acquire a green office property you can help protect the natural environment, have a healthier workplace, and take advantage of the special SBA 504 Green loan program, when the office property you are purchasing meets certain environmental standards.

Find out advantage of SBA 504 financing for office properties here.

Man in suit with graph showing loan interest rates

4) Loan Interest Rates for Dummies (and the Rest of Us)

We spend a lot of time talking about interest rates because they affect so much of our lives. On a personal level, they govern the cost of our mortgage, our credit card bill and our car payment. In business, they affect our ability to grow and expand, to invest in new equipment, and to purchase commercial real estate.

But how well do we really understand interest rates? Where do they come from? What do they mean, and how can we make smart financial decisions based on our expectations for future interest rates?

Click here to find out more about interest rates.

5) Characteristics of an Industrial Real Estate Hot Spot

Over the past few years there has been a revitalization of the industrial sector, driven primarily by e-commerce retailers looking for warehouse space that meets their specific needs.

On paper, that looks like decreased industrial vacancy and increased rents. What really makes an industrial hot spot in different regions?

Click here to see what makes an industrial hot spot.

6) The Interim Second – a Critical Element of Every SBA 504 Loan

If you’re familiar with SBA 504 loans, you’re likely at least familiar with the term “interim second.” But there’s also a good chance that you may not fully understand what an interim second is, and how critical it is to SBA 504 financing.

Click here to learn more about Interim Seconds for SBA 504 loans.

Flexible open office space

7) What a 25-Year Term on SBA 504 Loans Means for Business Owners

Last year, the SBA made the first major change to its 504 loan program in over 30 years: It added a 25-year term. Now, businesses owners applying for a SBA 504 loan can choose from a 10-, 20- or 25-year debenture. What’s different about a 25-Year SBA 504 loan?

Click here to find out.

8) Scale the Multifamily Mountain with a Bridge Loan

When your multifamily property deal needs to close before your agency loan is approved. When this happens, having a strong bridge lender on speed dial can make a commercial mortgage broker look like a hero to their client.

Find out more about bridge lending for multifamily here.

9) Spotlight on Self-Storage: What’s all the Buzz About?

This asset class may not exude the glamour of a shiny downtown office tower, but self-storage assets have for a long time been the unsung heroes of commercial real estate investments. People are talking more and more about self-storage.

Read why here.

10) Hotel Financing With the SBA 504 Loan Program

The US hotel industry saw another record year in 2018, reaching absolute values that were the highest ever benchmarked. A 10th consecutive year of growth is predicted for 2019, according to CBRE Hotels Americas Research. As experienced lenders, we are convinced that the best, most cost-effective solution is to finance your hotel is with an SBA 504 loan.

In this article, we will walk you through today’s peak hotel market, as well as recent changes that affect SBA 504 loans.

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Big News For SBA 504 Loans!

The SBA 504 loan program reached a couple of milestones this month. First, the 25-year loan program (which you can read about in our by-lined article here) reached $1 Billion in lending, just under a year since the program’s first funding in July 2018. This figure represents 1,289 fixed-rate 504 loans to U.S. small businesses.

The 25-year maturity’s success is attributable to an outstanding interest rate, which is fixed for 25 years. Over the past twelve months, the average effective rate for the 25-year product was below 5%.

The second big news is the 20-year SBA 504 loan funding at a historically low of 3.98%. This is the lowest it’s been in the program’s 33-year history, and below the December 2012 record of 4.01%.. At 152 basis points under the Bank Prime Rate, the June funding is the furthest below prime that 20-year rates have been since May 2007. (See chart above.)

Clearly, no time has ever been better for SBA 504 borrowers to lock in a fixed-rate commercial property loan. Beat the rush that will be triggered by the new low rates, and contact us today to get started. Liberty SBF can get the job done in 45 days or less.


SBA 504 Loan Rate Drops to Historic Low

This June, SBA 504 borrowers can secure financing at a 20-year fixed rate below 4 percent for the first time in the program’s 33-year history. The 20-year effective rate for June is 3.98 percent, below the December 2012 record of 4.01 percent.

At 152 basis points under the Bank Prime Rate, the June funding is the furthest below prime that 20-year rates have been since May 2007. Market observers are predicting that the Federal Reserve will make two ¼-point interest rate cuts this year, but even with cuts, the 504 effective rate may remain approximately one full point below prime. This is the first time a 20-year 504 effective rate calculation has been this low.

Clearly, no time has ever been better for SBA 504 borrowers to lock in a fixed-rate commercial property loan. Beat the rush that will be triggered by the new low rates, and contact us today to get started. Liberty SBF can get the job done in 45 days or less.


Rate Cut Expected as POTUS Pressures Fed

President Trump continues to criticize the Federal Reserve sharply for past interest rate hikes. He is demanding rate cuts in 2019. Stock market investors, rattled by threats to impose tariffs on Mexican goods, want rate cuts to bolster the equity market. Most (95 percent) Wall Street observers anticipate that the Fed will announce a quarter-point cut following its June or July meetings, according to BMO Capital Markets.

The Fed’s strategy conference last week in Chicago began to prepare the public for a round of quantitative easing in an effort to short-circuit opposition to the measure. Citing lessons learned following the 2008 crash, Fed Chairman Jerome Powell said the Fed must take measures now and purchase assets to counteract risks of a recession. Trump’s trade wars put the Fed in a tough spot as it tries to support high employment and low inflation (nytimes.com).

Rate cut or not, today’s low interest rates make this a good time to lock in a fixed rate commercial property loan. Liberty SBF can get the job done in 45 days or less.

Contact us today to get started.


Medical Office in Phoenix, SBA 504 Loan Benefits

The Latest Commercial Real Estate News From Liberty SBF

10 Reasons Applying For an SBA 504 Loan is Worth It

AZBigmedia.com published a summary of the top 10 reasons to apply for an SBA 504 loan. A low down payment topped the list, allowing business owners to purchase a property they otherwise couldn’t afford. A 30-40 percent down payment isn’t attainable for most small business owners but the SBA 504 loan program finances up to 90 percent of the acquisition plus some soft costs. Long term, fixed interest rates are other reasons to go SBA 504. The full list provides a quick education on 504 financing.

Phoenix Medical Office Vacancy Falls 33%

Doctors talking in hospital hallway

Demand in the form of an increased population has helped the medical office market in Phoenix. A new report from JLL shows that vacancy rates have fallen by 33 percent in the past five years. But, it’s not just a population boom that is driving growth in this corner of America. Over the years, Phoenix has attracted some heavy hitters in the medical provider sector including the Mayo Clinic, Banner Health and Dignity Health, the largest hospital system in the US.

The Drumbeat to Cut Rates Gets Louder

As the trade wars continue to escalate, Federal Reserve Chairman Jerome Powell reassured the financial markets, saying the Fed will “act as appropriate to sustain” the current economic expansion. Is a rate cut appropriate to the times? Anxious about the trade war, Wall Street is expecting that the Fed will cut its benchmark rate twice before the end of the year.

Liberty Closes Over $40MM in Industrial Property Loans

Liberty SBF clients have been participating in the new economy with over $40MM in industrial property loans closed across the county. See all of Liberty SBF’s recently closed loans.

How Can We Help You?

Liberty SBF offers quick closings for SBA 504 and conventional loans. We’d love to help you.

Let’s Talk.