🏛️ Case Study 2: 90% LTV SBA 504 Loan Secures New HQ

Our client, a thriving regional manufacturing and distribution firm, was leasing their operational warehouse. With leases set to escalate, the owners recognized that purchasing their own $3.2 Million industrial warehouse was essential for long-term stability and wealth creation.

The primary challenge was capital preservation. The owners had the equity for a standard down payment but preferred to keep that cash invested in inventory, R&D, and working capital to fuel rapid business expansion. They required the highest possible leverage—a low down payment solution—paired with the long-term stability that only fixed-rate financing provides.

As SBA experts, we immediately directed the client toward the SBA 504 Loan Program, specifically designed for owner-occupied real estate purchases that require maximum leverage.

1. Maximum Leverage Structure: We structured the deal to leverage the 504's unique, tri-party arrangement: a first mortgage covering 50% of the cost, a second mortgage covering 40% (guaranteed by the SBA), and the client only needing a 10% equity injection ($320,000).
2. Long-Term Security: We secured a 25-year fixed-rate term for the majority of the financing, protecting the client from interest rate volatility and providing predictable monthly payments for two decades.
3. Streamlined Documentation: Our team prepared and packaged the client's financials according to the strict SBA guidelines, accelerating the application review and approval process with our preferred SBA lender partners.

BCF Commercial Capital successfully secured the SBA 504 financing, allowing the client to acquire the $3.2 Million industrial facility while deploying only 10% of their own equity.

The client achieved the following:

• Working Capital Preserved: Over $500,000 in cash reserves remained in the business for growth initiatives, rather than being tied up in real estate equity.
• Cost Control: The client swapped increasing lease payments for a stable, fixed-rate mortgage payment, locking in long-term occupancy costs.
• Equity Built: The business began building significant equity and wealth through property ownership, setting the foundation for future retirement planning.

This case study demonstrates the power of pairing BCF’s deep banking expertise with direct access to SBA loan Products.