The space your business uses

SBA financing for the building your business uses

Buying the space your business uses starts with more than a purchase price. Your occupancy plan, project costs and cash after the move all belong in the financing conversation.

For construction or renovation, add another question: who advances funds during the work, and what must happen before permanent financing begins? Start with the transaction, then compare the structure.

01 / The financing path

7(a) or 504?

SBA 7(a) can support qualifying business property and other eligible uses. SBA 504 primarily supports major fixed assets. For a property purchase or construction project, plan operating cash separately from the 504 component. Qualifying 504 debt refinancing can also include eligible business expenses under its own rules; that is a separate refinancing structure, not a general working-capital line or a route for rental-investment speculation. SBA 7(a) overview · SBA 504 overview.

Ask how your proposed costs would be financed, which parties would participate and what cash you would need. One program’s headline does not determine the rate, maturity or funding conditions of your proposal.

On a narrow screen, scroll across the comparison.

Questions for the same property transaction
Question7(a) discussion504 discussion
What will the funds buy?Identify eligible property and other business uses; apply the rules for the actual transaction.Separate qualifying fixed assets from funding needed elsewhere.
Who supplies the financing?Identify the participating lender and Integra’s role.Identify the senior lender, Certified Development Company (CDC) and any interim source.
What happens during construction?Obtain the advance, interest, contingency and completion terms.Understand interim advances and conditions before debenture takeout.
What remains for operations?Show operating cash separately from property costs and borrower contribution.Identify working-capital sources outside the 504 component.
What does the financing cost?Compare actual rate, term, fees and early-exit provisions.Compare each debt component; one fixed rate does not describe the whole project.
When is debt due?Record amortization and maturity for the transaction.Record interim, senior and debenture terms separately, including any senior balloon.

Source: SBA SOP 50 10 8.1, program requirements and 504 Third Party Loan terms.

Can an SBA 504 refinance include money for business expenses?

Certain qualifying 504 refinancing projects without expansion can include eligible business expenses. The review starts with the debt being refinanced, the original use of its proceeds, the assets securing it and the operating business's eligibility. It does not mean any existing debt or any requested cash amount qualifies.

Separate refinancing without expansion from refinancing tied to an expansion project. Bring the original loan documents, later refinance documents, payment history, current balances, property-use information and an itemized expense request. Ask which expenses qualify and how collateral value, loan-to-value limits and the proposed loan structure affect the request.

Does “refinancing a 504 loan” mean the same as “refinancing into 504”?

Refinancing into 504 starts with existing debt and asks whether that debt qualifies for the 504 refinancing structure. Replacing an existing 504 project also involves its third-party loan and SBA-backed component. Current rules permit some existing federally guaranteed debt to be refinanced, subject to additional conditions. Identify both loans, any prepayment obligations and the proposed replacement structure before comparing monthly payments.

Basis: current SBA SOP, Section C, debt refinancing without expansion. Reviewed October 8, 2026.

02 / Business use

Who will use the space?

Operating-business occupancy is measured using rentable property. Ownership share, parcel acreage and tenant revenue are different measures. Prepare the actual space schedule and leases for lender or CDC review.

  • 51%

    For an existing building, the applicant’s operating business must occupy at least 51% of rentable property; up to 49% may be leased to third parties.

  • 60%

    For new construction, the business initially occupies at least 60%. Up to 20% may be permanently leased. An additional 20% may be temporarily leased with the intention to use some within three years and all within ten years.

Rentable property includes relevant common areas and excludes stairs, elevators and mechanical areas. Qualifying exterior business space may count; parking is excluded from that category. Living in part of a mixed-use building does not automatically count as operating-business use.

A separate property-holding entity can be eligible through an Eligible Passive Company (EPC) / Operating Company arrangement, subject to its conditions. The EPC leases the rentable property to the eligible operating company; the business’s occupancy and sublease limits still apply. Placing title in an LLC alone does not satisfy those conditions or remove required obligations.

Also separate improvement costs by space. SBA proceeds cannot fund improvements to rentable space that will be subleased to third parties. For 504, those improvements cannot secure the senior Third Party Loan. Occupancy timing needs actual review; do not assume a vacant building comes with an automatic one-year window.

Source: SBA SOP 50 10 8.1, Section A: Occupancy and Leasing Requirements and Eligible Passive Companies.

03 / Funding in stages

Funding in stages.

In a 504 project, interim financing and permanent takeout serve different stages. An eligible independent interim source advances project funds before the debenture sale. The permanent 504 proceeds repay the eligible project costs advanced for that component. Establish the source, release conditions and cash contribution before relying on a construction schedule.

  1. Define the project and participants

    Record the property, operating use, plans, estimates, borrower contribution, lender and CDC. Identify an interim source where needed. Approval is not a contractor payment.

  2. Agree on the construction advances

    Ask what each release requires: work completed, inspections, invoices, lien documents and cash already contributed. Record who reviews a request, how interest is charged and who covers overruns.

  3. Resolve completion and occupancy

    Project completion and full interim disbursement normally precede permanent 504 funding. A narrowly approved escrow exception may finish minor components; it is not a general permission to leave the project unfinished.

  4. Close the permanent component

    Confirm the actual takeout conditions and amount. The lender and CDC need to address changes in scope, costs, timing or occupancy; a timetable is not a guaranteed funding date.

  5. Keep the operating budget funded

    Track payroll, inventory, deposits, downtime and reserves separately. Finishing a building and having cash to open the business are different milestones.

Source: SBA SOP 50 10 8.1, Section C: Interim Financing and Construction Loan Provisions.

Building homes for sale?

Contractor or homebuilder project cash is a different use from constructing the building your own business occupies. Begin with the SBA hub’s working-capital section and describe the project cash need. This premises guide does not establish a Builders CAPLine or WCP offer.

04 / Repayment structure

Three tests. Different measures.

The occupancy percentage is a space test. It does not determine the maturity of a loan. Current rules also distinguish an ordinary loan with several uses from a purchase of the operating business and its property.

Property and other uses without an ownership change

For an ordinary multiple-use 7(a) loan, a blended maturity may apply. When at least 51% of the loan’s use of proceeds is real estate, an up-to-25-year maturity option may be available. This measures loan proceeds, not floor area. A maximum permitted term is not a promised loan term.

Buying the business with the building

The acquisition rules govern. Separate loans or a weighted blended maturity may be used under their conditions; the ordinary 51% maturity option does not apply. A narrow exception can permit up to 25 years for an owner-occupied special-purpose property inseparable from, and integral to, the operating-business acquisition, when at least 85% of total project costs are real estate. That measures project costs, not occupancy or only the loan amount. Use the business-acquisition guide for the combined transaction.

504 components can have different terms

Ask for separate debt schedules. The senior Third Party Loan can include a justified, documented balloon; its rate, amortization and maturity need not match the CDC debenture component. Compare the actual package rather than describing it as a single fully amortizing, fixed-rate 25-year loan.

Source: SBA SOP 50 10 8.1, Appendix 17: Loan Maturities; Appendix 15: acquisition Loan Maturities; Section C: Third Party Loan terms.

A blank planning paper

Bring the property and the timeline together.

Record facts first. Blank fields mean information is still needed; they do not mean zero. These worksheets prepare a discussion and do not calculate eligibility or establish a commitment.

Premises outline

Scroll across to see the notes column on a narrow screen.

Business use, project costs and important dates
Preparation itemYour outline / information needed
Property: existing building, renovation, new build or business-plus-building purchase 
Operating business and activity at the property 
Property owner and operating-company entities 
Total rentable area and area the operating business will use 
Tenants, leases, residential space and planned occupancy 
Purchase, site, build and equipment costs; estimates still outstanding 
Business-use improvements versus third-party subleased-space improvements 
Cash available for contribution and cash required after moving 
Target contract, construction, occupancy and funding dates 

Construction-to-operation sequence

Scroll across to see all four columns on a narrow screen.

Funding, conditions and gaps at each stage
StageWho supplies funds?Conditions and documentsCash or timing gap
Property or site purchase   
Contractor deposits and early work   
Construction advances and inspections   
Completion, occupancy and opening   
Permanent financing / 504 takeout, if applicable   
Payroll, inventory and operating reserves   

The next conversation

A clearer outline for the space you need.

Describe the business activity, property and intended use, transaction stage, approximate budget, occupancy plan and timing. Include the question you need to resolve. Keep sensitive documents for an appropriate next step.

Prepare an SBA inquiry

The existing Contact page prepares an email for you to review and send from your email app. Nothing is sent by these worksheets. This is not a loan application or an approval.

Website review · Integra’s planned SBA offering is confirmed; specific programs, provider arrangements, markets and construction capability remain subject to business review. This guide explains program considerations and does not confirm availability for a particular request.