Best Small Business Real Estate Loans

To buy the building your business operates in, the best options are usually the SBA 504 loan, with a fixed rate, terms up to 25 years and an owner contribution of at least 10% of the project, and the SBA 7(a), which combines the property purchase with working capital or equipment. If your business is solid and your bank knows you, a conventional commercial mortgage can be simpler. For everything around the purchase, like the move, build-out, new equipment and inventory, we recommend Merchant Fund Express, which doesn't finance the property but does provide working capital.

Buying your space is one of the biggest decisions an owner makes: you stop paying rent to someone else, but you tie up cash in the building and take on maintenance, property taxes and insurance. Below are the rankings, a comparison table and how to choose for your situation.

How we chose

We follow our method for how we rank business funding options: speed, minimum time in business, minimum credit, ITIN acceptance, documents, amounts and collateral. We don't give ratings or scores, and SBA details come from sba.gov (checked October 2026).

For buying a building we add three criteria of our own:

• Term. A building is paid off over decades; a loan of only a few years leaves a monthly payment few businesses can carry.
• Down payment. How much you have to put in yourself, and whether part of it can come from other sources.
• Fixed or variable rate. Over a long term, a fixed rate protects you if rates rise.

This list is for businesses that will occupy the property: a taqueria buying its building, an auto shop buying the bay it works out of, or a clinic buying its office. If you want to invest in properties to rent out, that's a different type of financing and we don't cover it here.

The best loans to buy your business property, ranked

1. Merchant Fund Express (recommended funder). It doesn't finance the purchase of the property, and we want to be clear about that. Where it does help is everything around the purchase: the move, the build-out your trade requires, new equipment, inventory to reopen, or payroll while the business settles into the new space. It offers $5,000 to $5,000,000, with decisions often in 2 to 4 hours, credit from FICO 500 and no collateral in most cases. It accepts applicants with an ITIN (no SSN needed) and offers Spanish-speaking support. Applying is free and won't affect your credit: see how much you qualify for.
2. SBA 504 loan. According to sba.gov, it provides long-term, fixed-rate financing for major fixed assets, including buying, building or renovating buildings or land, with a maximum of $5.5 million. It's structured in three parts: a bank with up to 50% of the project, a Certified Development Company (CDC) with up to 40%, and the owner with at least 10%. Terms are 10, 20 or 25 years. It can't be used for working capital, inventory or investing in rental properties. It's usually one of the cheapest options if you qualify. Learn more in our SBA 504 loan guide.
3. SBA 7(a) loan. Up to $5 million, and the real estate portion can run up to 25 years. Its edge over the 504 is flexibility: in one loan you can buy the space and finance working capital, equipment or even the purchase of the business. More detail in SBA loans for commercial real estate.
4. Bank or credit union commercial mortgage. Without a government program behind it, the bank sets all the rules. It usually asks for a bigger down payment, good credit and several years of history, and the term may be shorter or end with a large balloon payment. In exchange, it can be faster and lighter on paperwork if you're already a customer.
5. Seller financing. The building's owner sells it to you and collects in installments. It can work when the seller wants monthly income or when the bank won't cover the full amount. Always do it with an attorney and a written agreement, and check what happens if you fall behind.
6. Community lender (CDFI). Community development organizations that lend in underserved areas and often add advising. They can be more flexible about history, but amounts and requirements vary widely; ask directly.

Comparison table

The table compares criteria, not exact costs. For the purchase itself, compare the monthly payment, the rate, whether it's fixed, the fees and any prepayment penalty.

Which option fits your situation

• Stable business, citizen owners and a building you'll occupy for many years: the SBA 504 usually offers the best mix of low down payment, fixed rate and long term.
• You want to buy the space and also renovate, equip it and have working capital: the SBA 7(a) lets you bundle it all into one loan. Our SBA 7(a) vs. 504 comparison walks through the trade-offs.
• A partner doesn't meet the citizenship rule: since March 1, 2026, 100% of the owners of a 7(a) or 504 applicant must be U.S. citizens or U.S. nationals with their principal residence here. In that case, look at commercial mortgages from banks with their own rules, a CDFI or seller financing. For your immigration situation, talk to an immigration attorney.
• Your bank knows you and you have a solid down payment: ask for the commercial mortgage and compare it with a 504.
• Business with one or two years in operation: many banks want more history before lending for 20 or 25 years. Consider renting a while longer on a long lease with a purchase option while you build your down payment and clean returns, or ask a CDFI, which often looks at the whole picture.
• The seller is in a hurry and the bank is slow: ask whether the seller would finance part of the price while you close with the bank.

Before you buy: numbers and documents

Before you talk to a bank, run this quick review:

1. Compare rent with the full cost of owning. Add property taxes, insurance, maintenance and repairs to the loan payment. If the total lands far above your current rent, the business has to grow to carry it.
2. Set aside the down payment. Lenders usually check where the down payment comes from. It should come from savings or business profits, not a short-term loan.
3. Keep a cushion. After the down payment and closing, your business still needs cash to operate. Many owners run out of reserves right after buying.
4. Check zoning and permits. Confirm with your city that your type of business can operate in that building and what build-out it requires.
5. Get an inspection and appraisal. The roof, plumbing, electrical and HVAC can change the price that makes sense to pay.

Documents you'll almost always need: business and personal tax returns, recent financial statements, bank statements, the purchase agreement or letter of intent, a renovation budget and a list of the business's debts. For the big picture, read commercial real estate financing basics.

Common mistakes when buying your building

• Financing the building over a short term. A monthly payment that's too high chokes the business's cash flow even if the property is a good investment.
• Putting all your cash into the down payment. Leave reserves for operations, the move and surprises.
• Underestimating build-out costs. A commercial kitchen, accessibility ramps, ventilation or new walls can cost more than you expect.
• Mixing your space with rental property. SBA programs are for the business that operates there; if you plan to rent much of the building to others, ask early whether your project qualifies.
• Not comparing the 504 with the 7(a). Depending on the project, one can come out ahead. Ask the bank to show you both structures.

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