Which Types of Real Estate Businesses Can Get SBA Funding?

Which Types of Real Estate Businesses Can Get SBA Funding?

  • December 15, 2021
  • By Elizabeth Beall

Real estate is an incredibly broad industry and is home to many businesses ranging from assisted living facilities to retail stores and car washes. You can work as a business owner, investor, or employee and still fit under the umbrella. 

Such a wide array of businesses leaves owners questioning whether or not they are eligible for funding; not everyone or every business can be eligible, right? 

That’s correct! Don’t worry though — we’ve made you a list and provided an explanation for those who are not eligible.

What kind of real estate businesses are ineligible for SBA funding?

The short answer is real estate investment firms.

The long answer is: “property values are changeable and often inflated, and therefore considered a gamble.” Real estate investing is also “considered ‘speculating,’ which the SBA doesn’t condone with its backing,” as explained by SBA7A.loans. 

Instead, you can utilize a SBA 7(a) loan for land or real estate. Ask about our SBA funding options to see which is right for you, and which you would best qualify for.

What kind of real estate businesses are eligible for SBA funding?

There is a long list of eligible real estate businesses including, but not limited to:

  • Assisted living
  • Motels, hotels, and B&Bs
  • Restaurants
  • Bars and clubs
  • Retail stores
  • Office-based companies
  • Auto repair shops + car dealerships
  • Car washes
  • Preschools and daycares
  • Self-storage companies
  • Gas stations and convenience stores

Lenders and banks alike look for solid businesses who are credible, have a worthy financial history, and have a business plan, including your repayment plan. In essence, you are proving that you operate a valuable, successful business, have good credit, and are prepared to return what was borrowed.

Whereas, the opposite is seen in real estate investing, making this an ineligible business for SBA funding. It is viewed as more of a risk, and in some cases, more of a guess and check on ROI. This business plan, although most likely structured well with a strong portfolio of successful investments, is not the best option to provide funding for in lenders eyes..

Still hoping to learn more about real estate funding or have questions about your business’ eligibility for SBA funding? We’d be happy to walk you through the steps and answer any questions you may have.

Call one of our financial experts today. We look forward to speaking with you!

One Comment

  1. Cool post very informative I just found your blog and read through a few posts although this is my first comment, ill be including it in my favorites and visit again for sure

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