Owner-user financing is for borrowers that are both owners as well as tenants. This type of financing is used for acquiring, refinancing, and constructing owner occupied commercial real estate properties.

Purchasing owner-user financing is not for every business owner. The process of obtaining financing for owner-user commercial real estate involves a hybrid approach. The lender utilizes the value of the real estate, the strength of the business, and the credit qualifications of the business owner.

For example, many lenders require borrowers to have positive net cash flow for at least the past 2 to 3 years. The borrower must also occupy at least 51% of the gross-rentable space (normally for one year).Banks are the most common source of owner-user financing. Banks use this category of loan as a vehicle to establish a broader banking relationship with small businesses.

Owner-user loans may qualify for high leverage, low-rate structures through the SBA program.

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