Can a landlord or real estate investor get an SBA loan?
Short answer
Generally no. A business primarily engaged in owning real estate and leasing it for any purpose is ineligible. An Eligible Passive Company is the exception. Source: 13 CFR § 120.110(c); SOP 50 10 8.1, Sec. A, Ch. 1, Para. E.3.
Generally no. 13 CFR § 120.110(c) bars passive businesses owned by developers and landlords. The test is whether they actively use or occupy the assets the loan buys or improves. SOP 50 10 8.1, Sec. A, Ch. 1, Para. E.3 is more specific.
What is ineligible
- A business primarily engaged in owning or purchasing real estate and leasing it for any purpose.
- A business primarily engaged in subdividing land into lots and developing it for resale on its own account.
- Apartment buildings and mobile home parks.
An ineligible business cannot get an SBA loan for any purpose, even to buy or build a property for its own use (Para. E.3).
What can work
An operating business can buy its own building if it occupies enough of it. For an existing building, it must occupy 51% of the rentable property and may lease up to 49%. For new construction, it must occupy 60% (13 CFR § 120.131; Sec. A, Ch. 3, Para. C).
An Eligible Passive Company can hold the property and lease 100% of it to your eligible operating company. That is the exception in 13 CFR § 120.111.
Investment property
Proceeds cannot buy property held primarily for future development, sale, lease or investment, with limited exceptions (Sec. A, Ch. 3, Para. B).
Ask lending partners about your loan
Tell us the amount you need and what it is for. We refer you to lenders that may fund businesses like yours, and it costs you nothing.
Janover Capital LLC is not a lender and is not the SBA. The lender makes the credit decision. A lender or marketplace may pay us a referral fee if we connect you, at no cost to you. Advertiser disclosure.