Funding Entire Purchase Through Real Estate Loan

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May 13, 2026

by a searcher from University of Pennsylvania - The Wharton School in Durham, NC, USA

I'm looking at a deal right now to acquire a business and its real estate, with the real estate representing more than half of the purchase price (primarily looking at SBA loans). My understanding is that SBA 7A loans are usually 10-year amortization and higher rate, whereas real estate (often SBA 504) loans are 25-year amort and lower rates. The cash flow and DSCR do not work if I need to take the entire purchase price at a 10-year amort, and still don't work well if I take the business portion at a 10-year amort and the RE at a 25-year amort. However, if I can roll the entire price into a 25-year loan, the math starts to work well. The broker has assured me this is possible if the RE is more than half the purchase price, which it is. I would love to speak with anyone who has used this structure or has expertise on it to evaluate the feasibility.
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Reply by an intermediary
from The Johns Hopkins University in Gainesville, FL, USA
If the cash flow and DSCR "still don't work well if I take the business portion at a 10-year amort and the RE at a 25-year amort," then you are either paying too much for the business or not putting enough equity into it. Just my humble opinion.
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Reply by a searcher
from University of Michigan in Raleigh, NC, USA
I would recommend reaching out to Live Oak Bank. They are located in Wilmington, NC and are the #1 SBA lender. They would have some good insight. If you need an intro, just let me know.
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