Sacramento Commercial Real Estate Financing Up 26%

Small Business Administration (SBA) loan financing for commercial real estate purchases in the Sacramento region jumped 26 percent for the first half of SBA’s fiscal year compared to the same period a year ago, according to CDC Small Business Finance.

CDC reported that total SBA-504 financing provided to area small businesses was $92 million for Oct. 2014 to March 2015, compared to $73 million approved for the same six-month period the prior year. The average SBA-504 loan financing rose to $1.7 million, up from $1.4 million for the same six month period.

“Property values are on the upswing which is driving an increase in the need for capital,” said Ed Ryan, Sacramento loan officer for CDC Small Business Finance. “Before the Federal Reserve moves to raise rate, small business owners who’ve been on the sidelines are now thinking more seriously about purchasing their own building.”

The current rate through the SBA-504 program is 4.58%. The rate has been under 5% for 10 months.

The 504 loan program was created by the SBA for the specific purpose of financing long-term fixed assets such as commercial real estate and equipment with economic life of 10 years or greater.