SBA-backed financing may help qualified business owners purchase, construct, improve, or refinance owner-occupied commercial property. These loans are made through participating lenders and, in the case of SBA 504 financing, Certified Development Companies—not directly by your real estate professional.
Financing should be discussed early in the buying process. A lender can help you understand which programs may be available, what documentation will be required, and how much your business may reasonably qualify to borrow.
SBA 504 and SBA 7(a): Two Different Options
SBA 504 and SBA 7(a) financing may both be used in qualifying commercial real estate transactions, but they serve different purposes. Which option is best for you, depends on the property, the business, the proposed use of funds, and the lender’s requirements.
SBA 504 Loans
The SBA 504 program provides long-term, fixed-rate financing for major fixed assets. It is commonly considered for qualifying owner-occupied commercial real estate, new construction, building improvements, and certain major equipment purchases.
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Focused on major fixed assets
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Arranged through a lender and Certified Development Company
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May be used for qualifying real estate, construction and improvements
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Generally cannot be used for working capital or inventory
SBA 7(a) Loans
The SBA 7(a) program is the agency’s primary business loan program. Depending on the borrower and transaction, funds may be used to acquire, refinance or improve real estate and buildings, as well as for equipment, working capital and certain other business needs.
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Offers broader permitted uses
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Provided through participating SBA lenders
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May include real estate and other business expenses
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Loan structure and terms vary by transaction
Talk With a
Commercial Lender ...Early
You do not need to find a property before beginning the financing conversation. Speaking with a commercial lender early can help establish a realistic budget, identify documentation requirements, and clarify which properties or project expenses may qualify.
A preliminary conversation is not final loan approval, but it can help focus the property search and reduce avoidable surprises later.
Be Prepared to Discuss:
Business and personal financial history
Business cash flow and existing obligations
Available funds for the transaction
Proposed use and occupancy of the property
Planned improvements or equipment
Business experience and management
Desired purchase timeline
The type of property being considered
Documentation and eligibility requirements vary by lender, loan program, borrower and transaction.
Loan programs, underwriting standards, fees, occupancy rules, and approval requirements vary and may change. These answers provide general educational information. A participating lender should evaluate your specific business and proposed transaction.
How I Help
Guidance on the Real Estate Side
I am not a lender and do not determine loan eligibility or recommend a specific financing product. My role is to help you define your property requirements, identify and evaluate potential properties, coordinate transaction information, negotiate the real estate terms, and manage the purchase process through closing.
I work alongside your lender, attorney, accountant, inspectors, contractors and other professionals while keeping the needs of your business at the center of the property search.
Information on this page is provided for general educational purposes and is not a commitment to lend or legal, tax, accounting or financial advice. SBA program rules, eligibility requirements, loan terms, fees and lender requirements may change and vary by borrower and transaction. Consult a participating lender and the appropriate qualified professionals regarding your circumstances.