Using an SBA 7(a) Loan for Commercial Real Estate

Leveraging flagship SBA financing for land and real estate purposes.

Land and real estate are two of the biggest expenses you can have as a small business owner. Whether you're hoping to buy your current location (owner-occupied) or expand to a new building, the SBA 7(a) standard loan is a great financing option for business owners. There’s no strict down payment amount set by the SBA or another institution, but lenders often request 10% or more for higher-risk businesses. Additionally, the maturity for SBA-backed real estate and construction loans runs up to 25 years.

While most commercial property types are permitted, the SBA 7(a) loan program prohibits any funds from being used for an investment property like an apartment complex, homes with tenants, or multifamily and single-family homes. Some exceptions are made for medical services like family doctors and dentists, or even new veterinarian businesses. 

You can get a business mortgage using the SBA 7(a) loan for a wide range of industries and property types. Here’s a list of some of the most common industries that use this loan for real estate or land: 

  • Assisted living facilities

  • Bars and clubs

  • Hotels

  • Motels

  • Restaurants

  • Retail

SBA (7)(a) Sample Terms:

  • Loan Size: Can provide up to $5 million of capital for small businesses

  • Loan Term: Have loan terms of up to 10 years for working capital and 25 years for real estate

  • Interest Rates: Most loans currently have interest rates between 5.5% and 8% depending on loan size and maturity

  • Loan Use: Can be used for working capital, equipment, buying a business or franchise, refinancing debt, and purchasing real estate

  • Credit Requirement: Typically require a credit score of around 680

  • Down Payments: Usually require a 10% to 20% down payment, as well as a certain amount of collateral

  • Timing: SBA 7(a) loans can be approved in between 1-10 days, depending on the lender