Texas Real Estate Brokerage Sales Apprentice Education (SAE) Practice Exam

What is one characteristic of businesses owned by developers and landlords regarding SBA loans?

1. They must actively occupy the assets

2. They qualify for unlimited funding

3. They do not actively use or occupy the assets

4. They must retain a certain amount of assets

The correct answer is: They do not actively use or occupy the assets

Businesses owned by developers and landlords typically do not actively use or occupy the assets for which they seek financing, particularly in the context of SBA loans. Instead, these businesses often own properties that are leased out to tenants or developed for commercial use. Because these developers and landlords are primarily focused on investment and income generation through leasing, the assets themselves—such as commercial buildings or residential complexes—may not be utilized by the owners, which aligns with the characteristics of their business activities. In the context of SBA loans, lenders often evaluate the way the business uses its assets. Since developers and landlords might not occupy the properties they own, this characteristic is important as it reflects their business model of generating revenue through property management and development rather than through direct occupancy. This distinction helps lenders assess risk and understand the operational nature of the businesses applying for funding. The other options address different aspects of asset ownership and utilization that do not align with the typical operations of developer and landlord businesses. For instance, the requirement to actively occupy assets is more aligned with businesses that provide services directly from a location, not those focused on leasing to tenants. Qualifying for unlimited funding is not generally feasible, as funding limits and loan amounts are determined by various assessments and guidelines. Lastly, while retention of