SBA Real Estate Loans

How to Finance Commercial Properties with SBA Loans
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SBA Loan Programs

SBA (Small Business Administration) real estate loans offer eligible small businesses long term fixed-rate loans with low down payments (up to 90% LTV/LTC). There are 2 SBA loan programs that can be used for commercial real estate, SBA 7(a) and SBA 504. These two programs have some similarities, but one will likely be a better fit on a case by case basis.

When getting a SBA loan, 50% of your capital comes from the lender (usually a bank or credit union) and 30 - 40% comes from SBA. The remaining 10 - 20% is the borrower's equity (down payment). This means the exact terms of the loan (including the rate) vary by lender, because the lender sets the terms of their portion of the loan. To get the best SBA loan, it's important to compare SBA 7(a) and SBA 504 quotes from multiple lenders.

SBA loans are a great opportunity for businesses to own their property including industrial, retail, offices, warehouses, medical offices, and preschools. To qualify for SBA loans, a commercial property must be owner-occupied meaning that the borrower's own business must occupy at least 51% of the available square footage (60% for new construction).

Loan Amount:

$250,000 - $14 Million

Max LTV:


Typical Term:

5 - 25 years
  • Can lend based on projected business income
  • Up to 90% LTV
  • Closing cost rolled into loan amount

Operating Statements
Pro Forma Financials
Personal Financial Statement (for Guarantors)
  • Owner-occupied property
  • Sufficient credit score
  • Profitable business
  • Business track record

How to Get a SBA Loan

Borrowers should review whether their business is a better fit for a SBA 7(a) or a SBA 504 loan. The next step is to approach multiple lenders that participate in the SBA lending program to provide the necessary documentation to get loan quotes. After that, borrowers should compare these loan quotes with conventional lending options to find the financing that best suits their business. A StackSource Capital Advisor can help guide you through every step of this process. Submit your loan request and get your proposal in front of relevant SBA lenders in the StackSource lender network.

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Guide to SBA Loan Programs

SBA 7(a) Loan Program

The SBA 7(a) program allows access to working capital for a variety of business purposes. SBA 7(a) loans are a good fit for company growth. An SBA 7(a) loan is suitable to refinance or buy commercial real estate (including buildings and land).  Loan amounts up to $5 million with 90% LTV are available. For commercial real estate, these loans can be self-amortizing over up to a 25 year term. Businesses applying for the SBA 7(a) loan program must be profitable and in business for 2+ years.

SBA 504 Loan Program

SBA 504 loans are similar to the 7(a) program, but are better suited for term debt. These loans have the advantage of lower fees and larger loan amounts. SBA 504 loans also have no balloons or calls and they also allow borrowers to finance closing costs such as origination fees, title, appraisals, and environmental fees. Like the 7(a) program, a 504 loan can be used to acquire or refinance commercial real estate. However SBA 504 loans can also be used for construction and development of a property for your business.  SBA 504 loans can provide up to $14 million of financing with a 20 year amortization. Businesses applying for the SBA 504 loan program must be profitable and in business for 3+ years.

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