FAQ - What Real Estate Loan Is Best For Small Businesses?
For small business owners, there are three main types of commercial real estate loans: conventional commercial loans, SBA 7(a) loans and SBA 504 loans.
The best commercial real estate loan for your business will depend on the specific type of financing you need and the property you intend to finance. Let's look at the pros and cons of each, to help you make the best decision for your needs.
Conventional Commercial Real Estate Loans
If you're looking for traditional financing for your real estate purchase, a conventional business loan is probably the best option for you.
Conventional commercial loans tend to be the most straight forward type of commercial loan. They are what you would expect-a commercial mortgage backed by commercial property. The lender is typically a bank, credit union, or other type of investment institution.

SBA 7(a) Loan Program
The U.S. Small Business Administration (SBA) offers an array of loan programs for very small businesses — those with fewer than 500 employees. The most popular is the SBA 7(a) loan program, which can be used for working capital, to buy equipment or to buy commercial real estate (among other things).
Two big advantages of this program are that it allows borrowers with lower credit and/or a low cash injection to qualify, and it's typically easier to obtain than other types of financing. However, it can take a lot longer to close an SBA loan than a conventional one, so plan ahead!
SBA 504 Loan Program
Other options under the SBA umbrella include the SBA 504 loan program, which is a common SBA loan and is your best option for fixed-rate and long-term financing for fixed assets such as buildings, facilities, and land.
504 Loans allow borrowers long-term, fixed rate financing of up to $5 million for fixed assets (land, buildings, facilities, machinery and more) that promote business growth and job creation.
504 loans are available through partnerships with the SBA and cannot be used for nonprofit, passive, or speculative activities.
For detailed information about each loan type, visit our commercial programs page.
For more information about what loan is best for you, talk to our commercial experts. Call (727) 784-5555. Or ask a question using the form below.
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Check out our other helpful videos to learn more about credit and residential mortgages.


