Our commercial construction loans can help finance the project in front of you:
With long, fully amortizing terms and financing up to about 90% of the Total Project Cost to minimize your down payment, the SBA program that's the right fit depends on the project.
Owners with businesses that will occupy the finished space can apply.
To be classified as owner-occupied, the business must occupy at least 51% of an existing building or 60% of new construction.
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.
With TowneBank SBA Lending, borrowers benefit from having an SBA lending team and resources dedicated to managing not only your loan but also your construction project. This keeps financing and execution on track and moving toward completion.
Construction projects involve far more than securing financing. Having a dedicated SBA Lending team engaged throughout the project helps align financing milestones, construction progress, documentation requirements, and project execution so the process continues moving toward completion.
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SBA Preferred Lender
With in-house approvals, your SBA 7(a) loan and its SBA guarantee do not wait in the SBA's underwriting queue, so decisions come faster, and your closing timeline stays on track.
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Top 50 National SBA Lender
Ranked #34 among U.S. SBA lenders, reflecting a consistent commitment to SBA financing and support for business owners nationwide, from first-time buyers and startups to established, growing companies.
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Real Volume and Real Experience
Since October 1, 2025, TowneBank SBA Lending has approved $192.8 million in SBA loans, reflecting extensive experience supporting business acquisitions, commercial real estate purchases, practice financing, and growth-focused transactions.
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SBA Lending Is Our Entire Business
More than 50 professionals work exclusively on SBA lending, bringing specialized expertise to every transaction, from the first conversation through closing and servicing, and supporting business owners across 48 states.
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TowneBank SBA Lending
Specialized SBA lending expertise backed by the resources of a $22.6 billion relationship bank with more than 70 banking offices across its footprint, giving you local support at every step.
A construction project can affect the business long before the first payment is due. A delayed build-out can push back your opening, extend the time you are paying rent without operating, or force you to postpone hiring and equipment purchases. On a renovation, unexpected costs can put pressure on cash you had reserved for other purposes.
Commercial lenders do not widely offer construction financing because it is different and demanding; funds are advanced as work progresses and the collateral is constructed. So, the loan must be managed alongside the project. Our team finances and staffs the construction, with resources dedicated to keeping funding, documentation, and the build moving together from planning through completion.
At TowneBank SBA Lending, construction lending stays with a team that understands both the SBA structure and the demands of the build during the construction phase and beyond. Our dedicated internal SBA construction financing team administers the loan from closing through completion and permanent loan, rather than outsourcing the construction management to a third party.
That continuity means the people managing your financing and your construction remain familiar with your project when questions, change orders, disbursements, or documentation needs arise. We design the financing with your long-term needs in mind. SBA loans offer long, fully amortizing terms and up to 90% financing on most projects to help you retain operating capital in your business.
SBA 7(a) loans offer long-term financing for all your business needs and your construction project for you to operate and grow your business – all in one easy to manage loan. From leasehold improvements if you’re renting to ground up construction on your own land, all owner-occupied projects are eligible. While loan proceeds finance the construction, they can also include funds for furniture, fixtures, equipment, inventory, working capital and closing costs.
SBA 504 financing provides stability through a fixed rate structure with predictable repayment terms. This structure limits the use of proceeds to the real estate and potentially equipment with an expected life of ten years or more.
Both the SBA 7(a) and the SBA 504 products can finance new construction and owner-occupied renovations. In some cases, the two products can be combined on the same project to create a customized financing package. Leasehold improvements at a leased location are not eligible for 504 and must be done with the 7(a) product. Non-owner-occupied projects point to conventional commercial construction lending.
Normal credit standards apply, and every project is underwritten on the finished result, not just the plan to achieve it.
Construction financing follows the same core SBA process as other loans, with an additional construction review and project coordination component.
The commercial construction lending process begins with our construction pre-screen, before your documents are complete. In this initial step, we use contractor quotes and early project information to assess credit appetite while architectural, engineering, appraisal, and contract documents are still being assembled.
This step helps determine whether the project appears financeable before borrowers commit to the expense of full drawings. A pre-screen, however, is not a commitment to lend.
The business owner’s role is straightforward: provide contractor quotes and requested documents promptly so the team can keep reviewing the project as information becomes available.
Construction and 504 transactions involve additional review and coordination, so the process can take longer than other SBA financing, such as 7(a) loans with SBA Preferred Lender status.
Funding remains subject to underwriting, documentation, and normal credit standards.
Construction financing needs vary based on the project. These are the three most common types of SBA construction loan opportunities we finance.
Building out space you lease can transform an empty suite into the location your business needs to open or expand. From new retail locations to offices and clinics, it is the most common construction project we finance, with much of our work involving franchises.
Constructing a purpose-built facility on land you own can give your business a location designed around how you operate. The finished building must be business owner-occupied and meet applicable SBA requirements (otherwise, a conventional commercial mortgage may be a better fit).
SBA Commercial Real Estate Loans →If you already own and operate from your building, a major renovation, addition, or expansion can create needed space and functionality without relocating.
Explore Business Expansion Loan Options →Which Fits Your Project?
The type of project you're pursuing often determines which SBA loan program may be appropriate, what costs can be financed, and what information should be assembled before the financing process begins. Compare the most common construction financing paths below.
| Project Type | Program Fit | What Is Financed | What to Have Ready |
|---|---|---|---|
| Ground-Up | Both 7(a) and 504 | Construction of an owner-occupied facility with only 504, 7(a) can combine construction with fixtures, equipment, working capital, and other busienss needs. | Business and personal financial information, land details, contractor quotes, and preliminary project plans. |
| Leasehold Build-Out | 7(a) only | Improvements, furniture, fixtures, equipment, inventory, working capital, other business needs. | Business and personal financial information, lease details, cost estimates, preliminary project plans. |
| Renovation or Addition | Usually 7(a) | Renovations, additions, improvements to an owner occupied building, refinance of existing debt on the property, furniture, fixtures, equipment, other business needs. | Business and personal financial information, lease details, cost estimates, preliminary project plans. |
| Ground-Up | Both 7(a) and 504 |
|---|---|
| Leasehold Build-Out | 7(a) only |
| Renovation or Addition | Usually 7(a) |
| Ground-Up | Construction of an owner-occupied facility with only 504, 7(a) can combine construction with fixtures, equipment, working capital, and other busienss needs. |
|---|---|
| Leasehold Build-Out | Improvements, furniture, fixtures, equipment, inventory, working capital, other business needs. |
| Renovation or Addition | Renovations, additions, improvements to an owner occupied building, refinance of existing debt on the property, furniture, fixtures, equipment, other business needs. |
| Ground-Up | Business and personal financial information, land details, contractor quotes, and preliminary project plans. |
|---|---|
| Leasehold Build-Out | Business and personal financial information, lease details, cost estimates, preliminary project plans. |
| Renovation or Addition | Business and personal financial information, lease details, cost estimates, preliminary project plans. |
The first conversation confirms the appropriate program for your project, so you do not need to decide from this table.
Have business and personal financial information, cost estimates, and preliminary plans in hand? A construction pre-screen can help determine whether your project appears financeable before you commit to the expense of completing full design and project documentation.
Get started with our construction pre-screen and get an early read on financing before committing to the full design spend.
Construction Financing Questions
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Yes. Subject to applicable SBA loan requirements, leasehold build-outs are our most common construction project and are generally done using the 7(a)-loan product.
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No. Contractor quotes can support an early financing read while formal documents are assembled. However, a pre-screen is not a commitment to lend.
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Funds are released at closing for contractor mobilization, then funds are released through the life of the project based on documented progress reports and project milestones. All disbursements have a 10% holdback that is released to the contractor when the project is complete, and a Certificate of Occupancy has been issued. Funds for equipment and other needs are released as needed and documented through the construction period.
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Yes, this is normal in a ground up construction project. Note that in an SBA loan, the construction loan cannot close until all required permits have been issued and received. If the land is already owned, any debt on the land is normally refinanced long term as part of the financing package.
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Cost changes are common during construction. To account for this, we include a 15% contingency (and sometimes more depending on the project) on the quoted construction costs in your financing structure. Change orders are reviewed and must be approved by our Construction Management Team prior to disbursement of the contingency. If the contingency is not used in whole or part, the loan amount is normally reduced by the amount not used and your payment is adjusted accordingly.
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Credit Approval and Closing timelines depend on the project, its documentation, and required reviews. Note that in an SBA loan, the loan can’t close until all required permits have been issued and received. The actual construction timeline is determined by you and your General Contractor. As a result, completion and funding schedules vary.
Our commercial construction loans could help you turn your plans into a completed project with an experienced team's support.
If you have contractor quotes, get started with our pre-screen, the low-cost first step toward understanding business loans for construction and moving your project toward closing.
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.