If your business will occupy most of the space, an SBA loan can finance the purchase or construction of your building with far less down than conventional financing. Two programs dominate — the 504 and the 7(a) — and they suit different situations.
SBA 504: built for real estate
The 504 pairs a bank loan (about 50% of the project) with a loan from a Certified Development Company (about 40%), leaving you to put down as little as 10%. The CDC portion carries a long, fixed rate — attractive when you want payment certainty for decades.
It's purpose-built for owner-occupied real estate and major fixed assets like heavy equipment. The trade-off: two loans, more moving parts, and a somewhat slower close.
SBA 7(a): the flexible workhorse
The 7(a) is a single loan up to $5 million usable for far more than real estate — working capital, business acquisition, equipment, and refinancing existing debt. Rates are more often variable, and it's typically simpler and faster to arrange than a 504.
For a pure owner-occupied building purchase where you value a long fixed rate and the lowest down payment, the 504 often wins. When you need one loan to cover real estate plus other business needs, the 7(a) is usually the better fit.
What both require
Both are for owner-occupied property — your business must occupy a majority of the space (generally 51%+ for an existing building, more for new construction). Pure investment rentals don't qualify for SBA real-estate financing; a conventional CRE loan is the path there.
Compare real terms
Program rules set the frame, but the actual rate, fees, and timeline come from the lender. Compare SBA lenders in your borough and get matched to ones that fit your deal.