Small Business Today Magazine SEP 2014 ELP ENTERPRISES | Page 30

EDITORIALFEATURE

Ways Brokers Benefit From Offering

SBA Financing to Buyers                   
By Bruce Hurta

S

mall business real estate and small businesses themselves are often represented for
sale by a commercial real estate broker or a
business broker who will earn a handsome
commission from the seller in the transaction.

How do brokers earn their commission?

They will use all of their resources to find the best
buyer for the transaction.  Usually for the seller,
this translates into getting the highest price in the
shortest time possible.  Naturally, the broker must
be a professional who has the ability to call upon
many types of resources to make the transaction
a win-win for everyone involved.

One of the most critical resources is often
finding favorable financing for the buyer.   Small
businesses and small business properties do not
always receive the most favorable treatment
from traditional institutional lenders.  In the past,
community banks almost exclusively served the
credit needs of small business owners.  Today’s
environment has fewer community banks.  There
are more large banks that prefer working with
middle market businesses and public companies
over working with small businesses.  The government-guaranteed SBA loan program, therefore,
offers opportune financing to place in the tool
box of commercial real estate brokers and business brokers.

Here’s why:

• Because participating SBA lenders receive
a partial government guaranty as insurance
against future loan defaults, SBA loans have
lower down payments, longer repayment
terms, and easier qualifying criteria than conventional bank loans. More approved loan
applications translates into more closed
transactions for broker