Sale Leaseback with SBA Financing in a Tertiary Market – Structuring, Timeline & Challenges

searcher profile

June 10, 2025

by a searcher from Baruch College-The City University of New York - The Zicklin School of Business in Tampa, FL, USA

I’m exploring a potential sale leaseback transaction in a tertiary market, and considering the use of SBA 504 financing as part of the structure. I’d appreciate insight from anyone who’s executed or evaluated a deal like this—particularly around: • The process and timeline when SBA financing is involved • Key due diligence steps unique to this type of deal • How to position the leaseback structure to an existing owner-operator (we’re considering having them remain post-closing on a short-to-mid term lease, without spooking them mid-negotiation) • Challenges in securing investor interest in tertiary markets, and what makes these deals pencil out • Any gotchas to be aware of with SBA involvement, especially from a compliance or eligibility perspective I’m still early in structuring this, but would welcome any experiences, war stories, or practical tips. Open to connecting directly if you’ve done something similar.
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commentor profile
Reply by a lender
in Ponte Vedra Beach, FL 32082, USA
^redacted‌ ^redacted‌ I have worked on a few of these projects and there are some nuanced structuring needs which tend to be more specific to the project. Would be the most streamlined to have a call together and discuss past structures I’ve financed and maybe how those would or would not apply to your projects and what some preferred options for you could be. Please feel comfortable scheduling directly via my Calendly below or my cell is###-###-#### and email is redacted https://calendly.com/bturner-thebancorp/45min
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Reply by a lender
from University of Missouri in St. Louis, MO, USA
Walter, the 504 would be a good option if you want to hold onto the building. If you are doing a S/L the prepayment premium would be punitive. Seems more like you would do one or the other v a combo unless I am missing something
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