SBA 7(a) and 504 Loans
Financing for a business buying the property it operates from. The Small Business Administration guarantees part of the loan, which is what lets a lender accept a smaller injection and a longer term than commercial lending normally allows.
At a glance
- Purpose
- Business purpose
- Property
- Owner-occupied premises
- Programs
- 7(a) and 504
- Lender panel
- 20+
Scope: nationwide. SBA 7(a) and 504 is business-purpose lending, placed with SBA-approved lenders, and we broker it across the country, with Eric Figueroa as broker of record. Owner-occupied home loans are available in California only.The two programs
This is not investment property financing.
SBA is for premises your business occupies and operates from.
The two programs
7(a)
is the general-purpose program.
It can cover
- Owner-occupied property
- Equipment
- Working capital
- Refinancing business debt
- Business acquisition
More flexible, and typically the route where the need is mixed.
504
is specifically for fixed assets — real estate and heavy equipment.
Structured across two loans plus your injection
- A conventional firstfrom a lender
- A secondfrom a Certified Development Company, backed by the SBA
- Your injection
Longer terms on the property, and generally the better economics where the need is purely the building.
Which one fits is decided by what the money is actually for. That is the first question at the scenario analysis.
Who this fits
You rent your premises and buying would cost less than the lease
You are buying the building your business already occupies
You are expanding into a larger site
You run an owner-occupied commercial property — automotive, self-storage, retail, industrial, warehouse, office, or mixed use
You are acquiring a business along with its premises
Your business is profitable but does not have the injection a conventional commercial loan expects
Who this does not fit
The property is an investment. SBA requires your business to occupy a substantial share of the building. A property bought to let does not qualify, whatever the entity structure. Go to Investor Financing.
You need to close quickly. SBA files carry a second layer of approval and they are slower than conventional commercial lending. That is a real cost of the cheaper terms.
Your business is loss-making with no recovery in sight. The SBA guarantee reduces a lender's risk; it does not remove the requirement that the business can service the debt.
You want minimal paperwork. This is among the heaviest documentation loads in commercial lending.
How qualification works
Two things are underwritten in parallel.
The business — trading history, financials, tax returns, debt service coverage, and the owners' guarantees — and the property, by appraisal and by use.
The occupancy rule
The occupancy rule is what most often decides eligibility, and it is worth establishing before anything else. SBA sets a minimum share of the building your business must occupy, and it differs between an existing building and new construction.
We are a brokered business. The file is placed with SBA-approved lenders from a panel of 20+.
What you will need
About the business and its owners
- Business tax returns and financial statements.
- Personal tax returns and financial statements for every owner above the SBA's threshold.
- A business plan or projections where the premises change the operation.
- Debt schedule.
- Entity documents.
About the property
- The purchase contract.
- Lease history, if you are buying premises you currently rent.
- An appraisal, and an environmental report on many commercial properties.
Frequently Asked Questions
What is the difference between 7(a) and 504?
7(a) is general purpose and can cover property, equipment, working capital, refinancing and acquisition. 504 is for fixed assets — property and heavy equipment — and is structured across a conventional first, an SBA-backed second through a Certified Development Company, and your injection.
Can I use SBA to buy a rental property?
No. Your business has to occupy the premises. This is the rule that rules most inquiries out, and it is worth checking first.
How much of the building must my business occupy?
The SBA sets a minimum share, and it differs for an existing building versus new construction. We establish the current requirement against your specific property rather than working from memory.
How long does an SBA loan take?
Longer than conventional commercial lending — there is a second layer of approval. We will give you a realistic read once we have seen the file, and we will not promise a date.
Do I have to give a personal guarantee?
Owners above the SBA's ownership threshold generally do. It is a standard feature of the program rather than a lender's preference.
Can I refinance existing business debt?
Under 7(a), often yes, subject to the program's rules on what may be refinanced.
What property types work?
Owner-occupied commercial — retail, office, industrial, warehouse, automotive, self-storage and mixed use among them.
Can I buy a business as well as the building?
7(a) covers business acquisition. Whether it can be combined with the premises in one facility depends on the structure.
Do you fund these yourselves?
No. We are a brokered business and place the file with SBA-approved lenders.
What happens next
If the property is an investment rather than premises you occupy.
If timing will not wait
Hard Money / BridgeIf the timing will not wait for SBA approval and you need to bridge to it.
You are here
SBA 7(a) and 504 Loans
Financing property for your own business.
Request a Scenario Analysis
Tell us what the business does, what share of the building it would occupy, and what the money is for. Those three answers establish whether SBA is open to you and which program fits.
Nothing on this page or website constitutes an offer of credit, a rate quote, or a commitment to lend. All loans are arranged through third-party lenders and are subject to full application, credit approval, income/asset verification, property appraisal, and underwriting. Terms and availability are subject to change without notice. Loankey.io is a licensed real estate broker; loans are arranged, not made. Investor and business-purpose lending nationwide. Owner-occupied home loans in California.