SBA Financing Commercial Building (51% occupancy?)

December 11, 2024

by a searcher from Georgia Institute of Technology in Atlanta, GA, USA

Any lenders out there with experience financing a multi-unit commercial/flex building? This building has 10 units. We occupy 3 of the 10 and want to buy the entire building. About half of the building is rented and all 10 units have their own separate TIN (tax ID/parcel #), which makes it more complicated. Not sure if lender (or SBA) would need all 10 units combined into one parcel number? Seller does not want to sell them individually and wants to unload entire building. Property is located in Georgia. $1.4M purchase price. Thanks in advance!

Reply by a lender
from University of Missouri in St. Louis, MO, USA

Fred, it depends on the usage and the plan. you occupy 3 units but each unit has it's own EIN. Are these condos or one individual building? If the latter why would their be separate EINs? you occupy 3 units today. If you want SBA funds you operating company (if that is what we are talking about) would have to occupy 5-6 units within short order to be SBA eligible. Feel free to email me to discuss if you think that would be helpful. redacted

Reply by an intermediary
from Wake Forest University in Winston-Salem, NC, USA

SBA will only do "owner-occupied," which requires you to occupy 51% of the building, so if your units aren't oversized and comprise 51%, it is likely a challenge with the SBA. See ^redacted‌'s comment below.

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