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Best business loans for buying commercial property in 2026
The best loan for buying commercial property your business will occupy is an SBA 504 loan, which pairs a bank mortgage with a low fixed-rate CDC loan and can require as little as 10% down. An SBA 7(a) loan is more flexible when the purchase includes equipment or working capital. Investment property you will lease to others is financed with a conventional commercial mortgage.
By the WithFunded team · Published November 11, 2026 · Rates as of November 2026
The short list
- Best overall for owner-occupied property
- SBA 504 loan
- Best when the deal includes more than real estate
- SBA 7(a) loan
- Best for investment property
- Commercial real estate loan
- Best for strong borrowers who want speed
- Bank term loan
The 4 best options, ranked
1. SBA 504 loan Best overall for owner-occupied property
The 504 structure is built for this purchase: long terms, a fixed rate on the CDC portion, and a lower down payment than most conventional mortgages.
Watch for: Only for fixed assets. It cannot fund payroll, inventory, or other working capital. SBA loan guide →
2. SBA 7(a) loan Best when the deal includes more than real estate
A 7(a) loan can finance the building plus equipment, improvements, and working capital in one loan with terms of up to 25 years for real estate.
Watch for: Heavy documentation, and the timeline rules it out for anything urgent. SBA loan guide →
3. Commercial real estate loan Best for investment property
A building you will rent to tenants does not qualify as owner-occupied. A conventional commercial mortgage underwrites the property's rental income.
Watch for: Appraisal, environmental review, and closing add both time and cost. Commercial real estate guide →
4. Bank term loan Best for strong borrowers who want speed
An established business with a banking relationship may close a conventional owner-occupied mortgage faster than an SBA loan.
Watch for: The slowest route outside SBA and the hardest to qualify for. Term loan guide →
Side-by-side comparison
| Option | Verdict | Cost basis | Funding speed | Qualifies on |
|---|---|---|---|---|
| SBA 504 loan | Best overall for owner-occupied property | CDC portion roughly 6.6% on 10 to 25 year terms | Weeks to months | Owner-occupied real estate or major equipment, plus a down payment |
| SBA 7(a) loan | Best when the deal includes more than real estate | Capped at 10.00%–13.50% by loan size (prime plus the SBA maximum spread) | Weeks to months | Generally stronger credit and two or more years in business |
| Commercial real estate loan | Best for investment property | Conventional pricing varies by property and borrower; long amortization | Weeks to months | A stronger profile and a down payment; the property is the collateral |
| Bank term loan | Best for strong borrowers who want speed | About 7% median on new small-business term loans (Kansas City Fed, Q4 2025) | Weeks | Strong credit, established financials, often collateral |
What it costs
SBA 7(a) rates are capped at prime plus a maximum spread that shrinks as the loan grows. At the current 7.00% prime rate, these are the highest payments a lender could charge on a 25-year term:
| Loan amount | Maximum rate | Monthly payment at the maximum |
|---|---|---|
| $400,000 | 10.00% | $3,635 |
| $1,000,000 | 10.00% | $9,087 |
| $2,500,000 | 10.00% | $22,718 |
Payments at the SBA maximum variable rate for each size tier. Many borrowers qualify below the maximum. Source for rate caps: U.S. Small Business Administration. WithFunded calculation.
What lenders look at
- How much of the building your business will occupy. SBA programs require a majority for existing buildings.
- The property appraisal and environmental review.
- Business cash flow relative to the new mortgage payment.
Mistakes to avoid
- Comparing the mortgage payment to rent without adding taxes, insurance, and maintenance.
- Committing all your cash to the down payment and leaving the business short.
Frequently asked questions
- How much down payment is needed for commercial property?
- SBA 504 can require as little as 10% for qualifying owner-occupied purchases. Conventional commercial mortgages and investment properties usually require more.
- Is it better to buy or lease commercial space?
- Buying fixes your occupancy cost and builds equity, and suits a business that will stay put for many years. Leasing preserves cash and flexibility.
- What is the difference between SBA 504 and 7(a) for real estate?
- A 504 loan is only for fixed assets and typically has the lower rate. A 7(a) loan can also cover working capital, equipment, and goodwill in the same loan.
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How we ranked these options
This guide ranks types of financing, not individual lenders. Each option is ordered by how well it fits the need described on this page, judged on four things in this order: whether the structure matches how the money will be used and repaid, total cost, funding speed, and how hard it is to qualify. Cost figures are WithFunded calculations from published rate inputs as of November 2026: the bank prime loan rate from the Federal Reserve, the SBA maximum-rate schedule, and Federal Reserve survey data. The method follows our 2026 SMB Financing Cost Report, whose own figures use June 2026 rates.
WithFunded is a financing marketplace, not a lender. Our 2-minute form suggests a product type from the families we cover, and a funding partner reviews the request. Not every structure named in this guide is available through WithFunded: options such as SBA microloans, USDA farm loans, bank loans, and seller financing are ones you would pursue directly with the provider. They are listed because leaving out a good fit would make the ranking less useful.
Related guides
The top-ranked option on this page is SBA 504 loan because it fits the most common version of this need. Your own best fit depends on your revenue, time in business, credit, and how fast you need the money.
Disclaimer. WithFunded and Big Think Capital are a financing marketplace; we are not the direct lender and do not guarantee funding, approval, rates, or terms. Everything on this page is a representative example only — not an offer or a commitment to lend, and not financial advice. Actual rates, fees, payments, and terms are set by the funding lender and depend on your business, credit, and the product. Where required by state law, the lender provides cost-of-financing disclosures before any agreement is signed.