An SBA Commercial Real Estate Loan for the Place Your Business Calls Home

Buy, build, or refinance an owner-occupied commercial property with long-term financing designed around the needs of your operating business.

An SBA Loan for Commercial Property Your Business Occupies

An SBA commercial real estate loan with TowneBank SBA Lending can help you purchase, build, or improve the property your operating company occupies through the SBA 504 and 7(a) programs. These loans offer long-term, fixed-rate financing with fully amortizing terms. Plus, they tend to require far less cash at closing than conventional business financing.

Determining whether the property in question is considered owner-occupied is simple: your business must occupy at least 51% of the square footage under the roof of an existing property or 60% if you are constructing a new building. Property you intend to lease to others is classified as investment property and, instead, requires a conventional loan.


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Let's Talk About Your Project

Have questions about SBA financing? Tell us about your project, and a member of our SBA Lending team will help you explore potential financing options and next steps.


When Your Property Decision Becomes a Business Decision

The Lease is Ending

Your renewal terms are getting worse, and your landlord controls the timeline. Instead of starting another lease cycle on someone else's terms, an owner-occupied commercial real estate loan could help you purchase the property, often with far less cash than you might assume.

The Space No Longer Fits

Your business has outgrown the building or has more space than it needs, but moving means starting the lease cycle again. A business expansion loan → could help you purchase a property that fits your next chapter, often with far less cash than you might expect.

The Building is For Sale

Your landlord has decided to sell, and you have the opportunity to act before the property goes to market. With an SBA loan for commercial property, you may be able to purchase the building your business already occupies, often with significantly less cash upfront than many business owners expect.


Which Owner-Occupied Commercial Real Estate Loan Is Right for You?
The right owner-occupied commercial real estate loan depends on what you're financing, how much flexibility you need, and how your project is structured. Before you begin, we recommend reviewing our SBA loan requirements → .

  • SBA 504 Loan

    Business meeting
     
    For You If
    You're purchasing or building a long-term space for your business.

    SBA 504 financing is designed for projects centered around owner-occupied commercial real estate and qualifying equipment. It focuses on long-term fixed-asset financing and includes a Certified Development Company (CDC) as part of the underwriting process.

  • SBA 7(a) Loan

    business man in a call
     
    For You If
    You want greater flexibility around the overall transaction.

    SBA 7(a) financing can support owner-occupied real estate while also accommodating eligible project-related needs. Through our Preferred Lender status, underwriting and SBA approval are handled in-house, helping streamline the financing process.

  • Check Your Eligibility

    SBA Loans Commercial Property
     
    Confirm If Your Project Fits
    Owner-occupied properties may be eligible for SBA financing.
    • Your operating company must occupy at least 51% of an existing building or 60% of a new construction project, measured by square footage. Any remaining space may be leased to other tenants.
    • SBA financing is intended for buildings your business operates from. Property purchased primarily to lease to others is considered investment real estate and typically requires a conventional commercial mortgage.
What to Gather
  • Three years of business financial statements.
  • Three years of personal tax returns for business owners with 20% ownership or more.
  • A purchase contract or letter of intent, if available.
Who Qualifies
  • U.S. citizens who own for-profit, U.S.-incorporated businesses can apply.
  • Your operating company must occupy at least 51% of an existing building or 60% of new construction, measured by building square footage (you can lease the remainder)
Replace Rent Payments with Ownership

You've leased your space for years. With every renewal, rent has increased, and your business has continued sending money toward a property it doesn't own. Over time, many business owners begin to ask whether those same dollars could instead support ownership.

A conventional purchase may require roughly 25% of the purchase price in cash, plus closing costs. That's capital you may prefer to preserve for operations, growth initiatives, hiring, inventory, or unexpected expenses.

SBA Financing Can Reduce Your Upfront Cash Requirement

While SBA financing doesn't change the purchase price, it can significantly reduce the amount of cash needed to complete the transaction. SBA financing may cover up to approximately 90% of the total project cost. In certain rent-replacement situations, where an operating company is purchasing the building it occupies or moving from leased space into owned space, up to 100% financing may be available through SBA 7(a) loans → .





Why Ownership Matters

Ownership can provide significant long-term advantages. Instead of negotiating lease renewals and absorbing future rent increases, you gain greater control over your occupancy costs while building equity in a property your business uses every day.


How We Determine Eligibility

Whether a transaction qualifies for this level of financing depends on the property, the business, and standard credit considerations. That's exactly what our first conversation helps determine.


Two Financing Options, One SBA Commercial Real Estate Solution

The right SBA loan program depends on your property, your financing goals, and how your transaction is structured.

SBA 504 Financing

Often best for straightforward purchases of owner-occupied commercial property or major equipment.

  • Long-term fixed-asset financing
  • Well-suited for real estate and equipment purchases
  • May reduce the need to pledge personal assets

 Learn about SBA 504 financing → 

SBA 7(a) Financing

Frequently preferred when flexibility is needed or when real estate is only part of the transaction.

  • Ideal for rent-replacement transactions
  • Can combine real estate and business acquisition financing
  • May include working capital needs
  • 10-business-day credit decision goal once a complete file is assigned

 Learn about SBA 7(a) financing → 

What to Expect
1
Pre-Screen & Term Sheet
2
Submission & Underwriting
3
Appraisal & Environmental Review
4
Closing & Servicing

SBA 504 loans include an additional underwriting review through the CDC and approval with the Small Business Administration, which typically extends the timeline compared to a 7(a) loan.

A Note About Rates

SBA loan rates vary by program and transaction. When evaluating monthly payments, overall structure, down payment requirements, and repayment terms are often more important considerations than interest rate alone.


Have a Building in Mind?

Get started by telling us about the property in front of you. We'll talk through the building, your plans for it, and which SBA program may fit your transaction.

Tell Us About Your Property

Commercial Property Financial Questions

  • Your business must occupy at least 51% of an existing building or 60% of new construction. You can lease the remaining space.
  • No. These programs finance buildings your company operates from. Property purchased to lease to others points to a conventional commercial mortgage.
  • Up to 100% financing of the Total Project Cost is possible on qualifying rent-replacement deals through a 7(a) loan only, depending on the property, business, and transaction.
  • 504 often fits straightforward fixed-asset purchases, while 7(a) offers greater transaction flexibility.
  • Yes. SBA 504 and 7(a) financing can be combined on one transaction when the structure and project meet applicable requirements.
  • SBA-backed commercial construction loans can support eligible construction, renovation, and improvements to your owner-occupied property.
  • To help support working capital and cash flow, an SBA Express loan may be available as a companion facility alongside a larger SBA transaction, depending on your financing needs and qualifications.

Ready to Make the Property Yours?

If you’re ready to move toward closing on the property, get started with our experienced team at TowneBank SBA Lending. Tell us about the building and your plans, and we’ll help determine how an SBA commercial real estate loan may fit.

Insights & Perspectives

Some applications may require further consideration, and additional information may be required. 

Credit terms are subject to approval. 

Amount of Credit is subject to SBA program.