Small business owners in California and Arizona are turning increasingly to SBA-504 financing to fund the purchase of their own building, according to data released by CDC Small Business Finance, a nonprofit lender.
According to CDC, in the last six months, 518 small business owners in California have been approved by the SBA to receive $1.5 billion in financing to buy commercial real estate to help them expand their companies and create jobs. For the same six-month period in 2014, small business entrepreneurs secured $1 billion in SBA-504 financing. The average SBA-504 loan in 2015 thus far is $2.8 million versus $1.9 million in 2014.
In Arizona, small businesses committed to $88 million in SBA-504 financing to fund building purchases, compared to $68 million for the same six-month period a year ago. The average SBA-504 loan in 2015 is $2.3 million compared to $1.7 million last year.
“The improving economy is motivating small business entrepreneurs to commit to building equity for themselves by buying their own building and putting rent payments in their past.,” said Kurt Chilcott, President/CEO or CDC Small Business Finance.
“The other take-away from this data is that commercial/industrial property values, which plummeted during the recession of 2009, are rising. Combined with sustained low interest rates, small business owners are motivated to take the purchase plunge,” said Chilcott.