Case Study 103: Advertising Firm Acquires LA Headquarters with SBA 504

Discover how NextGen CRE Solutions can help a dynamic advertising agency secure its ideal industrial/office building in Los Angeles, leveraging the SBA 504 program for minimal upfront investment.

The Client's Vision & Challenge

• Business: A thriving advertising firm in Los Angeles, specializing in billboard creation, licensing, and sales.

• Track Record: Established for 7 years, boasting over $2 million in annual revenue.

• Property: A $2,800,000 industrial/office building in a prime LA location, perfect for their creative and operational needs.

• Borrower Profile: Exceptionally strong credit and a robust financial history.

• Goal: Acquire the property with the lowest possible down payment to retain working capital for continued business growth.

NextGen's SBA 504 Solution & Outcome

NextGen CRE Solutions can strategically identify an SBA 504 Loan Program as the optimal path for the client. This program is specifically designed to facilitate owner-occupied commercial real estate acquisitions, offering favorable terms and low borrower equity requirements.

By partnering with NextGen, the client can successfully transition from leasing to owning their critical business asset, securing long-term stability and building equity in the vibrant Los Angeles market, all while preserving essential capital for operations and future expansion.

Typical Due Diligence Requirements for SBA 504 Loans

Business & Financial Documentation

• Business federal tax returns (3 years)

• Business financial statements (P&L, Balance Sheet - 3 years)

• Business plan and projections

• Articles of Incorporation/Organization & Bylaws

• Operating Agreement (if applicable)

Personal Guarantor Requirements

• Personal federal tax returns (3 years)

• Personal Financial Statement (PFS)

• Credit reports for all guarantors

• Resumes/bios for key principals

Property Specifics & Assessments

• Appraisal report

• Phase I Environmental Site Assessment (ESA)

• Title commitment and insurance policy

• Boundary and ALTA/ACSM surveys

• Purchase Agreement and related documents

SBA Program Compliance & Timelines

• Job creation/retention projections (SBA Form 1244)

• Owner occupancy verification (51% for existing, 60% for new construction)

• Borrower certifications (various SBA Forms)

• Adherence to critical SBA processing and approval timelines

• Post-closing compliance requirements

Commercial Loan Terms and Definitions

Educational Module 100

Understanding the specialized language of commercial real estate financing is crucial for successful investment. This section demystifies key terms, metrics, and roles involved in commercial lending, helping you navigate the complexities with confidence.