I work for a SBA lender. In the Standard Operating Procedure, it says "Business Loan Proceeds Restrictions, Loan proceeds may not be used for any of the following purposes (including the replacement of funds used of borrowed for any such purpose): Investments in real or personal property acquired and held primarily for sale, lease or investment. In addition, Apartment buildings and mobile home parks are not eligible." - in case anyone was wondering where it says in SBA eligibility

I am a SBA Loan Underwrite. You can only use SBA loan to finance owner occupied properties such as gas stations, restaurant properties. You CANNOT use SBA loan to finance investor properties such as apartment building, multifamily etc.

The SBA will not do an apartment building unless it is a mixed use building and your business will be located there. If the building is in Chicago, check out the Community Investment Corporation for loans.

We had an SBA loan. You must occupy 51% of the building. Be careful with the loan terms though. They don't want you backing out early and there are penalties. They would not consider the coworking/desk share model for me for a new loan, though if I'd had operating financials on a previously existing desk share then they would consider that my business for an SBA loan.

One of the stipulations when I was looking into an SBA loan is that your business must occupy at least 51% of the occupiable space. Hope this helps.

@gennagolden can you give a brief description of the type of loan u were able to secure from the SBA

what about coworking spaces or live/work mutlifamily?

@Rob ShahNo SBA does not lend on apartment buildings. Under the SBA SOP guidelines real estate investors are not considered a business.

When you need some money to start, build, or grow your business, you’ll want to know the differences between business loans and business lines of credit. Each serves a unique purpose that could propel your business forward. Knowing the differences will help you make the best decision about what is best for you and your company at the moment you need capital. https://merchcash.com/resources/post/ways-to-utilize-a-merchant-cash-advance/

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Updated over 5 years ago on 11/03/2019. Most recent reply

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Posts: 18
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Rob ShahPoster

Real Estate Agent
Chicago, IL

Commercial Real Estate Investing

SBA loan?

Rob ShahPoster

Real Estate Agent
Chicago, IL

Posted January 21, 2014 21:20

I live in chicago and was wondering is it possible for get funding from the SBA for an apt building I am interested in buying? Are the credit rules more relaxed or more stringent? Thanks Rob

Rob Shah

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