I would like to share a case study on SBA 504 commercial real estate financing.
My firm, TMC Financing, recently helped Karl Ramos and Ana Espinoza, co-owners of Dean & Gray Care Services, secure $1.6 million in an SBA 504 commercial real estate loan. The funds were used to purchase an assisted living facility housing her 12 residents in Carmichael, California. Ramos and Espinoza acquired the property at his 25-year fixed rate below market value for just a 15% discount. Through this acquisition, these small business owners will work to establish personalized, high-quality, long-term care for their residents.
The right mix of family and experience
The Dean & Gray team has the right balance of experience to successfully run newly acquired care facilities. Espinoza and Debbie Ramos (Karl’s wife) are both registered nurses with decades of work experience. Through senior management positions in his District of Sacramento Municipal Utilities, Karl has over 10 years of experience in managing business operations and budgets.
Together, they oversee the day-to-day operations of Dean & Gray (technically, the Dean Estate and Gray Manor – taking the middle names of Carl and Debbie’s sons).
A leadership team works with dedicated staff to meet residents’ needs, including assistance with feeding, dressing, and bathing. In addition, we invite musicians and artists to perform concerts, flower arrangement workshops, and other programs that make everyday life more enjoyable.
The facility’s previous owners recognized the quality care Espinoza and Ramos could provide to its residents. When negotiating the terms of the sale, Ramos considered financing options. That’s when he discovered his SBA 504 loan.
“When we first looked at our funding options, SBA 7(a) was the program we looked at,” Ramos explains. option for our project. ”
The SBA 504 loan program not only offers a lower down payment than traditional commercial real estate loans, it also offers a fixed interest rate for the life of the loan and a longer amortization period (typically 25 years). That means less monthly payments.
low down payment
Ramos connected with Arlene Villarin, Vice President of Business Development at TMC Financing. who worked diligently to promote the project.
“Special purpose projects like assisted living facilities often require very large down payments, sometimes as high as 40 percent,” says Villarin. “For Dean & Gray, the down payment requirement was only 15%, so a 504 loan was the best financing option. For many small business owners, this is a dream come true difference.”
The transaction was completed on May 6th and the change of ownership is proceeding smoothly.
A small business dream come true
Karl offers other business owners these insights:
SBA’s commercial real estate lending providers can guide you through the process, from prequalification to loan term, and can be your advocate every step of the way.
California business and civic leader Barbara Morrison is the founder and president of TMC Financing, an approved development firm that provides SBA commercial real estate financing. Morrison is a former mayor and city councilor of the City of Belvedere, California, an advocate for women and small business owners, and has provided leadership to many community organizations.
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