SBA loan basics
Short answer
Generally, no. Businesses primarily engaged in passive activities, such as owning and leasing real estate for investment purposes, are usually ineligible for SBA 7(a) loans. The business must be active and operating.
The SBA 7(a) program is designed to support operating businesses. Businesses that derive more than 50% of their gross income from passive activities (e.g., rents, dividends, interest) and do not use the assets for their own operating business purposes are typically ineligible. There are exceptions for businesses like hotels/motels or self-storage facilities that provide services beyond just renting space.
If a company owns a commercial building and simply collects rent from tenants without providing any additional services, it would be considered a passive business and ineligible for an SBA 7(a) loan. However, if that same company operates a fully-serviced office space within that building, it could be eligible for a loan related to its operating business.
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
SBA 7(a) Loans Overview
Last checked 2026-06-14. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-14 · SBA sources checked through 2026-06-14. 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 eligibility
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