SBA 7(a) Flex Space Feasibility Study in Massachusetts

Massachusetts flex lending that stopped

The 28 flex-type loans in Massachusetts under 7(a) total $17.1 million, but the story is the calendar: 9 loans in FY2021, 6 in FY2023, then none in FY2024, FY2025 or FY2026, all shown at $0. The FY2024 note applies: SBA lessor lending nearly stops from that year, and Massachusetts shows the stop in full. The midpoint of $489,500 is 0.82x what lessor loans reach nationally at the midpoint, with quartiles at $166,000 and $1.0 million. Franchised loans are 7.1%.

Ranks and counties

Massachusetts takes rank 20 on loan count, and the class is only 19 of 39 at home. Middlesex County has 9 loans, Barnstable and Worcester 5 each, Essex 3, Norfolk 2 and Berkshire 1. The holder column is blank for this cell, so none is named. Earlier years were modest: 3 loans in FY2017, then 1 each in FY2018 and FY2019, and 3 in FY2020 with $3.0 million.

Why the class is hard to isolate

In SBA's coding a flex building is indistinguishable from its office and retail landlord neighbors, and a single code serves flex, office, retail and hall rental. The loans counted here therefore include the investor buildings that neighbor a true flex property. For Massachusetts, SBA prints neither of its two outcome rates, as the cohorts are below its minimum; a reader has no outcome floor from this page.

What a Massachusetts flex study has to test

Because new lessor loans have almost disappeared from this program since FY2024, a borrower should expect the study to carry more of the argument than precedent can. Show vacancy and asking rents for comparable flex and light-industrial buildings in the town or county, the creditworthiness and lease terms of the tenants, and what finish each user type needs. The Boston ring, Worcester County and the Cape have very different tenant bases, so say which applies. Construction or acquisition cost, tax rate and operating expenses should be itemised. An owner-user must show that its own business can carry the payment; an investor must show that the tenants' rent alone does. Run the loan with a vacancy case and a roll-over of the largest lease. Appraisers weigh income against comparable sales, and the rents assumed in the study should survive both tests.