Table of contents
The new vehicle dealership sector in the United States increased by 4.5 percent from 2012 to 2017. The following five years, according to IBISWorld, are likewise projected to be boom years.
You may benefit from this by looking for government-backed loans from conventional lenders such as banks, credit unions, and lending organizations.
For loans of above $150,000 and up to $5 million, up to 75 percent of the SBA 7(a) loan is guaranteed. SBA 7(a) loans for commercial real estate and land have a 25-year maturity. They may have fixed interest rates and prepayment penalties that decrease as time goes by.
As long as the usage is for a valid business purpose, the SBA 7(a) loan may be utilized for virtually all of your auto dealership’s needs:
A new auto dealership building and parking lot are being built
The SBA 7(a) may pay any of the expenses connected with a new building, including big lots, visible signs, bay doors, alarms and security, and so on.
A auto dealership’s refinancing
The SBA 7(a) funding may be utilized to refinance an existing loan. When it comes to this usage, there are certain restrictions; for more information, see our article on Debt Refinancing.
The company is expanding to a new site
Another frequent use of the SBA 7 is to purchase an existing structure (a). Because car dealerships are often custom-built, choosing the appropriate site is critical.
SBA 7(a) Loan Calculator is a useful tool
SBA 504 LOANS CAN BE A GOOD OPTION FOR CAR DEALERSHIPS AS WELL
While the SBA 7(a) loan is a great alternative for a lot of people, it isn’t right for everyone. Many auto dealership owners, in fact, discover that the SBA 504 loan is a better match for their requirements. The 504 loan has a lower down payment and lowers interest rates than the 7(a) loan, but it may only be used for commercial real estate, heavy equipment, and other fixed assets, net working capital.