Business owners that need a commercial mortgage should be thinking of government sponsored programs first, as they remain the most reliable programs out there. Borrowers may not like some of the features, but bottom line, if they need a new commercial real estate loan this maybe their only option, besides commercial hard money.Why do the SBA loan programs have a sour reputation? First of all, some of it is warranted and a lot of it is not. The SBA does have some outstanding features and many commercial borrowers would have never gotten a shot at commercial real estate ownership without the benefit of the SBA. A huge example of this is 90% financing… Conventional source go to 75%. That 15% difference can be a big chunk of capital for a small business. Another is the ability to use projections and or work with borrowers that have little cash flow – most conventional sources just say no to these commercial loan requests.One of the biggest complaints that is for the most part avoidable is the length of time to close and coupled with the amount of documentation needed. In essence the complaint boils down to that the process is just too cumbersome.However, much of this “brain damage” can be avoided by sticking with PLP lenders – i.e. preferred SBA lenders. The important point here is that PLP lender only has to have their deals underwritten once. Non PLP lenders, have to underwrite their files themselves, than the SBA gets their hands on the file and underwrites it a second time. As you can imagine, this second underwriting puts another month or longer onto the file. This is exactly where those horror stories come from of closings that take 6 months come from.The other main complaint is the expense to close. For example on the famous SBA 7a program the SBA (NOT THE BANK) charges a “guarantee fee”, i.e. points on the front of the loan that they add into the loan balance. The fee is 2.75% of 75% of the loan balance. As a comparison most conventional banks only charge 1%. There are only a few ways to avoid this. For example we work with a bank that pays this SBA fee themselves, but 99% of the time the borrower has to swallow this fee.Due to the credit crisis, the SBA is definitely the most reliable loan program out there for owner occupied loans. If you are in need of financing give this option some serous research.