SBA 7(a) Q&A
Short answer
Yes, an SBA 7(a) loan can finance both the business acquisition and the purchase of real estate from a seller's separate entity, provided certain conditions are met.
For a business acquisition where the real estate is owned by an affiliate of the seller, the SBA 7(a) loan can be structured to finance both components. The transaction must still be arm's-length, and both the business and the real estate must be independently appraised to ensure fair market value. The operating company must acquire the real estate or lease it from a newly formed Eligible Passive Company (EPC) that receives the loan.
A buyer wants to acquire a manufacturing business for $1,200,000 and the facility, owned by the seller's separate LLC, for $800,000. An SBA 7(a) loan can be structured for a total of $2,000,000 to finance both the business and the real estate purchase.
Insider move
Lenders ensure proper independent valuations for both the business and the real estate. They also verify the arm's-length nature of the transaction and ensure the real estate is integral to the business operations.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 10 - Lender and Development Company Loan Programs
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
More on real estate
Terms in this answer
Pre-qualify your SBA 7(a) deal
Tell us the business, the price, and where you are — we'll point you to the lenders most likely to fund a deal like yours and flag anything that trips up approval.
Free · No documents · Usually same-day