SBA 7(a) Q&A
Short answer
If the real estate is not 100% utilized for the business, the unused portion must be minor, or the lender will need to justify its inclusion and ensure rent from other tenants covers any unused space.
SBA loans are primarily for business purposes. If real estate includes an unutilized portion, it must generally be incidental to the main business use or generate rental income that supports the business and its debt service. The borrower must occupy at least 51% of the property.
If you buy a $1.5 million business that includes a building where the business uses 70% of the space, and the remaining 30% is rented out to an unrelated tenant, this is generally acceptable. The rent income would be factored into the business's cash flow.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
7(a) Loan Program — Terms, Conditions, and Eligibility
U.S. Small Business Administration · Official SBA source
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.
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