Last updated: February 21, 2026
Commercial real estate SBA loans consistently offer some of the lowest rates in the SBA lending market. With the Prime Rate steady at 6.75% and federal rates held in January 2026, commercial real estate borrowers are seeing attractive financing opportunities.
Based on our analysis of 13,351 SBA commercial real estate loans funded in FY2025-2026, the average SBA loan rate for commercial real estate is 8.87%, with a median rate of 9.00% and an average loan size of $1,366,748.
Current SBA Loan Rates for Commercial Real Estate
| Loan Size Range | Rate Cap | Current Max Rate | Typical Range |
|---|---|---|---|
| $350,000+ | Prime + 3.0% | 9.75% | 7.75% – 9.25% |
| $150,000 – $349,999 | Prime + 3.5% | 10.25% | 8.25% – 9.75% |
| Under $150,000 | Prime + 4.5% | 11.25% | 8.75% – 10.75% |
Why Commercial Real Estate Gets the Lowest SBA Rates
Superior Collateral Position
Commercial real estate provides tangible, appreciating collateral that lenders can easily value and liquidate if necessary. This strong collateral position allows lenders to offer their most competitive rates.
Larger Loan Amounts
With an average loan size of $1,366,748, most commercial real estate loans fall into the $350,000+ category, benefiting from the lowest rate cap of Prime + 3.0%. Lenders also achieve better economics on larger loans.
Longer Repayment Terms
SBA commercial real estate loans can have terms up to 25 years, compared to 10 years for most business loans. Longer terms spread risk over time, allowing lenders to price more aggressively.
Stable Cash Flows
Commercial properties with established tenants provide predictable cash flows, making them less risky than other business ventures from a lender’s perspective.
SBA 504 vs SBA 7(a) for Commercial Real Estate
| Feature | SBA 504 | SBA 7(a) |
|---|---|---|
| Down Payment | 10% (sometimes 15%) | 10-25% |
| Rate Type | Fixed rate on SBA portion | Fixed or variable |
| Max Loan Amount | $5.5 million SBA portion | $5 million total |
| Use Restrictions | Owner-occupied only | 51%+ owner-occupied |
| Best For | New construction, major renovation | Existing properties, flexibility |
Owner-Occupied Requirement
All SBA commercial real estate loans require owner-occupancy:
SBA 7(a) Requirements
- Minimum 51% owner-occupied by square footage
- Owner-occupancy must begin within 12 months of closing
- Can lease remaining space to other tenants
SBA 504 Requirements
- Must be at least 51% owner-occupied
- Primary business operations must be conducted on-site
- Stricter monitoring of owner-occupancy compliance
Rate Factors That Impact Your Commercial Real Estate Loan
Property Type and Location
Lenders prefer:
- Office buildings in established commercial areas
- Retail spaces in high-traffic locations
- Industrial properties with good access and infrastructure
- Mixed-use properties with diversified income streams
Loan-to-Value (LTV) Ratio
Lower LTV ratios typically result in better rates:
- 75-80% LTV: Standard rates
- 70-75% LTV: May qualify for rate discounts
- Under 70% LTV: Often best available rates
Debt Service Coverage Ratio (DSCR)
Commercial real estate DSCR requirements:
- Minimum 1.15x DSCR for most lenders
- 1.25x+ DSCR for best rates and terms
- 1.35x+ DSCR may qualify for premium pricing
How to Get the Best Commercial Real Estate SBA Rates
Property Appraisal Strategy
Work with experienced commercial appraisers who understand SBA requirements. A thorough appraisal supporting your purchase price is crucial for rate approval.
Environmental Due Diligence
Complete Phase I Environmental Site Assessments early in the process. Clean environmental reports can help secure better rates and avoid delays.
Strong Financial Presentation
- Provide 3+ years of business and personal tax returns
- Prepare detailed cash flow projections
- Document all income sources and lease agreements
- Maintain strong personal and business credit scores
Lender Selection
Different lenders specialize in different property types and markets. Working with a broker who knows which lenders offer the best rates for your specific situation is crucial.
Commercial Real Estate Loan Terms and Structure
Typical Loan Terms
| Loan Type | Maximum Term | Amortization | Prepayment |
|---|---|---|---|
| SBA 7(a) Real Estate | 25 years | 25 years | No penalty after 3 years |
| SBA 504 | 20 years (25 for manufacturing) | 20/25 years | No penalty |
Market Trends Affecting Commercial Real Estate Rates
Several factors are creating favorable conditions for commercial real estate SBA loans:
Stable Interest Rate Environment
With the Federal Reserve holding rates steady in January 2026 and the Prime Rate at 6.75%, borrowers have rate certainty for their financing decisions.
Increased Lender Competition
More lenders are actively pursuing SBA commercial real estate loans, leading to competitive rate offerings and more flexible terms.
Strong Commercial Property Fundamentals
Many markets are seeing stable or improving commercial real estate fundamentals, making lenders more comfortable with aggressive pricing.
GoSBA’s Commercial Real Estate Expertise
50+ Lender Network
Our network includes lenders who specialize in different property types, from office buildings to industrial facilities. We match your property with lenders who understand your market and can offer competitive rates.
$320M+ in Commercial Real Estate Funded
We’ve helped clients secure over $320 million in SBA financing across all loan types, with a significant portion going toward commercial real estate acquisitions and development.
No-Cost Service
Our commercial real estate financing service is completely free to borrowers. We’re compensated by lenders only when your loan closes, ensuring our interests are aligned with yours.
End-to-End Support
From initial underwriting through closing, we manage every aspect of your commercial real estate SBA loan, including:
- Property evaluation and lender matching
- Application preparation and submission
- Appraisal and environmental coordination
- SBA approval process management
- Closing coordination and funding
Compare Commercial Real Estate Rates to Other SBA Categories
Commercial real estate consistently offers the most competitive SBA loan rates:
- Commercial Real Estate: 8.87% average (you are here)
- Business Acquisitions: 9.31% average
- New Businesses: 10.29% average
- Working Capital: 10.53% average
For comprehensive rate information across all categories, visit our main SBA loan rates page.
Ready to Secure Your Commercial Real Estate Financing?
Get competitive rates from 50+ lenders specializing in commercial real estate. Free consultation and rate quotes.
Frequently Asked Questions
What is the current average SBA loan rate for commercial real estate?
Based on 13,351 loans funded in FY2025-2026, the average SBA loan rate for commercial real estate is 8.87%, with a median rate of 9.00%.
Should I choose SBA 504 or SBA 7(a) for commercial real estate?
SBA 504 typically offers lower rates and down payments but requires 100% owner-occupancy. SBA 7(a) offers more flexibility with only 51% owner-occupancy required but may have slightly higher rates.
What is the owner-occupancy requirement for SBA commercial real estate loans?
SBA 7(a) requires minimum 51% owner-occupancy, while SBA 504 requires the property to be primarily used by the borrower’s business. Owner-occupancy must begin within 12 months of closing.
How long does it take to get approved for a commercial real estate SBA loan?
Typical timeline is 60-90 days from application to closing, including appraisal, environmental review, underwriting, SBA approval, and closing coordination.
What property types qualify for SBA commercial real estate loans?
Eligible properties include office buildings, retail spaces, industrial facilities, warehouses, and mixed-use properties, provided they meet the owner-occupancy requirements and are used for business purposes.
