Resources for Ownership
A variety of resources for financing and tools for ownership exist to help small businesses and nonprofits acquire commercial real estate.
Photo Credit: Kevin Hernandez
SBA Loans (Small Business Administration)
Many banks make loans to small businesses using the federal backed SBA loan program. The SBA doesn’t make loans directly to borrowers; rather, it guarantees loans to encourage lenders to lend to small businesses. Both 7(a) and 504 Loans can be used for real estate acquisition. Borrowers can start with local banks or they can get matched with lenders through the SBA website. SBA loans are a great place to start before seeking out other programs.
CDFIs (Community Development Finance Institutions)
Colorado is home to over a dozen CDFIs located in every corner of the state. CDFIs may operate as a loan fund, credit union, or bank. Each lender has its own mission-related focus, often supporting a specific demographic or geography. Others may lend only for affordable housing or small businesses growth, for instance, but several will make loans for commercial real estate acquisition. Some CDFIs that make loans for real estate include Colorado Enterprise Fund, First Southwest Community Fund, and Impact Development Fund.
PRIs (Program-Related Investments)
Program-Related Investments are low-cost loans or other types of investments private foundations make as a strategy that complements their grant-making. With a primary goal of creating impact related to the foundation’s mission, the financial return is often a below-market rate, creating a favorable borrowing opportunity for nonprofits (and sometimes social-impact for-profit businesses). To determine which funders make program-related investments, nonprofits can start by asking their current funders about opportunities. Community foundations and donor-advised funds also make similar types of impact investments. Examples of funders that make program-related investments or impact investments for real estate include The Colorado Health Foundation, The Colorado Trust, The Denver Foundation, and Gates Family Foundation. Nonprofits should contact their current funders and other funders directly for requirements.
New Markets Tax Credit (NMTC) Financing
Large development projects that create economic opportunity through job creation may be eligible for NMTC. Organizations receive funding through Community Development Entities (often CDFIs) that receive tax credit allocation through the CDFI Fund. NMTC funding is a helpful but complicated type of funding.
Community Land Trusts help steward the land for a multitude of purposes for residents now and for the future. Center for Community Land Trust Innovation provides support for community land trusts and resources for starting a community land trust. Colorado-Based Land Trusts include Urban Land Conservancy, Thistle Communities, Colorado Community Land Trust, Chaffee Housing Trust, Elevation Community Land Trust, GES Tierra Colectiva, Goose Creek Community Land Trust, and Rocky Mountain Community Land Trust.
Sharing Connexion is a Colorado-based nonprofit organization supporting nonprofits with real estate transactions. Programs include helping organizations accept real estate donations, and helping with financing or acquisitions through its real estate impact and real estate rescue programs.
Center for Community Wealth Building
Center for Community Wealth Building is an economic justice organization providing several programs including promoting ownership through cooperative development and providing technical assistance for small business owners.
CHFA (Colorado Housing and Finance Authority)
With housing in its name, borrowers may not realize CHFA also provides financing products for commercial real estate acquisition for small businesses and nonprofits. In addition to direct lending, CHFA provides credit enhancements, bond financing, and New Markets Tax Credit allocation for projects. The credit enhancement product is especially helpful because although it’s not a down-payment assistance program, it helps borrowers qualify for a mortgage with a lower down payment. CHFA also has loans specifically for nonprofits and for fresh food retailers.
With housing in its name, borrowers may not realize CHFA also provides financing products for commercial real estate acquisition for small businesses and nonprofits. In addition to direct lending, CHFA provides credit enhancements, bond financing, and New Markets Tax Credit allocation for projects. The credit enhancement product is especially helpful because although it’s not a down-payment assistance program, it helps borrowers qualify for a mortgage with a lower down payment. CHFA also has loans specifically for nonprofits and for fresh food retailers.
DEDO (Denver Economic Development and Opportunity)
While restricted to businesses and nonprofits operating in Denver, DEDO provides an array of capital options and technical assistance resources for commercial real estate acquisition. Programs and support include small business development, small business loans, equity investments for businesses, performance loans for nonprofits acquiring real estate, technical assistance for small business, programs for BIPOC entrepreneurs, gap funding, nonprofit facilities grants, legacy business funding, and technical assistance for commercial property management. Organizations and small businesses located outside of Denver can contact their local Economic Development Corporation, many of which provide funding, technical assistance, and creative programs to support businesses in their communities.
State Historical Fund & Preservation Tax Credits
For historic properties, the State Historical Fund provides grants for rehabilitation and preservation of historic properties for public benefit. Federal and State Historic Preservation Tax Credits are tax incentives that offset a percentage of rehabilitation costs for historic preservation projects including commercial properties.
Small Business Anti-Displacement Network (SBAN)
SBAN is a network of nonprofit advocates, technical service providers, real estate developers, policy makers, lenders, and small business owners that work to prevent the displacement of BIPOC and immigrant owned businesses in gentrifying neighborhoods. SBAN created an extensive toolkit (antidisplacement.org/toolkit/) with anti-displacement strategies and tools including commercial preservation and ownership resources.
Community Field Notes by National Equitable Recovery Alliance
Resources for community land ownership and real estate stewardship including models and resources for community land trusts, community investment cooperatives, land banking, and community investment funds. Also offers an extensive resource hub on these topics.