Lot Loans Texas: Build a New Space for Your Business
July 7, 2023
Has your business reached full capacity or production limits at your current location? If your company is growing and needs more space, the ideal solution might be buying an adjacent lot to expand your current facility.
The purchase of a nearby lot may offer significant growth and expansion possibilities. But you will need to finance the purchase for your business without impacting long-term stability.
For companies interested in buying unimproved property, lot loans Texas Gulf Bank offers may be able to elevate your business capabilities.
The Basics of Lot Loans Texas Businesses Should Consider
A lot loan allows you to buy unimproved land so you can construct a new facility at a later time when you’re ready to build. This step is especially important if your business doesn’t want to lose the opportunity to own a specific lot nearby but may not have the funding or building plans ready for expansion.
With funding from a lot loan, your business can own the land you’ll use for your eventual business expansion.
Since your property would be considered unimproved land and may require less property insurance compared to fully developed commercial lots, you could possibly pay lower taxes for your business.
Industries that may benefit from lot loans include:
- Manufacturing
- Fabrication
- Agriculture or ranching
- Supply chain management
- Retail or warehouse facilities
Businesses needing lot loans can choose from several types of loan programs, including conventional land loans or SBA loans.
Conventional Approach
Conventional land and lot loans provide businesses with the funding needed to pay for unimproved or raw land for future commercial development.
Lot loans through Texas Gulf Bank are permanent loan programs that offer fixed or variable interest rates, monthly payments that are typically affordable, and amortization terms that differ from other kinds of commercial loans.
SBA Approach
SBA loans are loan programs guaranteed by the Small Business Administration (SBA) that are designed to help boost small businesses by providing funding options that encourage growth. For new or growing businesses, there are two primary SBA lending options to choose from.
SBA 7(a) loans
SBA 7(a) loans are the most popular SBA lending choice, and they provide financing for real estate purchases, including raw or undeveloped land. In addition, funds may be used for other business expenses, such as:
- Building construction
- Inventory
- Equipment and tools
- Working capital
- Business acquisitions
- Partner buy-outs
These are fully amortizing loans with no balloon payments and competitive interest rates.
SBA 504 loans
SBA 504 loans may also be used to purchase undeveloped land. Funds from an SBA 504 loan may only be used for specific uses, including:
- Business buildings or facilities
- Large-scale machinery
- Renovations or expansions
- Long-term equipment
SBA 504 loans are fully amortized with fixed interest rates. These loans are also intended for businesses that are for-profit companies. When applying for this option, you must provide detailed business plans and demonstrate relevant management experience.
Texas Gulf Bank can help you identify the best possible loan program for your specific lending needs. We offer the expertise and guidance you need to move your business forward.
The Lot Loan Application Process
As Texas Gulf Bank, we offer strategic solutions to help businesses finance the acquisition of new land for future expansions or development, including lot loans.
Our loan application process begins with an initial discussion to assess loan viability, including business history, financial records, and land information.
Applicants will need to provide the following documentation, including but not limited to:
- Completed loan application
- Financial statements
- 3 years of business tax returns
- 3 years of personal tax returns from loan guarantors
- Year-to-Date Business income statement and balance sheet
- Land surveys and/or plats
- Future development or construction plans
- Environmental Site Assessment (ESA) of the land
Once all documentation is received, our loan review team will assess the loan application and supporting records.
As a local bank with an in-house loan review team, we have the ability to make expedited lending decisions once we receive all required documentation.
You’ll also benefit from a single point of contact to keep you updated throughout the loan process. If your lot loan application is approved, we will process loan closing and funding as soon as possible to support your timeline.
Start The Application Process Today
Is your business ready to move forward with a land purchase? When you’re ready to apply for financing on lot loans Texas Gulf Bank is here to help!
Contact us today to begin the application process. Or reach out to our helpful lenders to discuss your intentions for a lot loan purchase. We look forward to supporting your company’s expansion plans.
All Loans Subject to Credit Approval