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Best SBA loans for commercial real estate in 2026
The best SBA loan for commercial real estate is the 504 loan, which pairs a bank loan with a CDC loan at a fixed rate around 6.6% and can require as little as 10% down. The 7(a) loan is the better choice when you also need equipment or working capital, or want one loan and one closing. Both require the business to occupy most of the property.
By the WithFunded team · Published November 11, 2026 · Rates as of November 2026
The short list
- Best for the lowest fixed rate
- SBA 504 loan
- Best for one loan covering everything
- SBA 7(a) loan
- Best when the property is an investment
- Commercial real estate loan
- Best for speed with strong credit
- Bank term loan
The 4 best options, ranked
1. SBA 504 loan Best for the lowest fixed rate
The CDC portion is fixed for up to 25 years, which protects a business from rate increases on its largest fixed cost.
Watch for: Only for fixed assets. It cannot fund payroll, inventory, or other working capital. SBA loan guide →
2. SBA 7(a) loan Best for one loan covering everything
A 7(a) loan can finance the building, improvements, equipment, and working capital together, with up to 25 years on the real estate.
Watch for: Heavy documentation, and the timeline rules it out for anything urgent. SBA loan guide →
3. Commercial real estate loan Best when the property is an investment
If your business will not occupy the majority of the space, SBA programs do not apply and a conventional commercial mortgage does.
Watch for: Appraisal, environmental review, and closing add both time and cost. Commercial real estate guide →
4. Bank term loan Best for speed with strong credit
A conventional owner-occupied mortgage from your bank may close faster, usually with a larger down payment.
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 for the lowest fixed rate | 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 for one loan covering everything | 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 when the property is an investment | 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 speed with strong credit | 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 |
|---|---|---|
| $500,000 | 10.00% | $4,544 |
| $1,200,000 | 10.00% | $10,904 |
| $3,000,000 | 10.00% | $27,261 |
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
- Owner occupancy: at least 51% of an existing building.
- Appraisal and environmental report.
- Business cash flow against the new payment.
Mistakes to avoid
- Ignoring 504 prepayment penalties if you might sell within the first years.
- Choosing by rate alone when a 7(a) loan's flexibility would save a second loan.
Frequently asked questions
- What is the down payment on an SBA 504 loan?
- As little as 10% for qualifying projects. New businesses and special-purpose properties generally require more.
- Is SBA 504 or 7(a) better for buying a building?
- A 504 loan usually has the lower fixed rate. A 7(a) loan is more flexible and can fund other needs in the same loan.
- What does a $1.2 million real estate loan cost?
- On a 25-year SBA 7(a) loan at the current maximum rate, about $10,904 a month. A 504 structure would typically be lower.
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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.