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Owner-user Financing

The Madison Group Arranges $1,700,000 loan for a Daycare Center in Utah

Tags: owner-user financing, SBA loans
Monday, Jun 25, 2018
by Angela Kesselman
The Madison Group (TMG), a leading source of owner occupied financing nationwide, arranged the $1,700,000 refinance of a 12,350 square-foot daycare center in Utah.  The borrowers requested a loan to refinance out of existing SBA loans on an owner-user office space. TMG secured the financing with a 10-year fixed rate of 5.5% and a 20-year amortization at 80% LTV.

The daycare center has been in business for many years and produces excellent income. The real estate holding company also realizes a nice profit.  The property, which was built for this tenant in 2008, is in a great location and could be used as an office. The owners desired to get out of the existing SBA 504 loan and obtain long-term conventional financing.

The owners needed an 80% non-SBA refinance in order to cover the closing costs.  Although the property could be used as an office with some small modifications, it is considered special use.  Most lenders will only allow 75% LTV on this type of transaction.

“We were able to place the loan with a lender that offered 80% financing with a good long term rate,” said Angela Kesselman, TMG’s director of Finance.  “The borrowers were able to close without bringing any cash to the table.  They no longer have to pay mortgage insurance either, which was required on the SBA loan that was paid off."
  
“We secured a great long-term loan for this client that had a specific need.  Our knowledge of the local marketplace allowed us to quickly analyze the transaction and find the right lender,” Kesselman said.