Owner Occupied Properties

Professionals consider owner-occupied properties to purchase with the help of qualified lenders like Cornerstone Capital.

When you decide to buy a business property, looking down the barrel of a hefty mortgage can be incredibly intimidating. However, as a savvy buyer, you likely understand the inherent benefits that come with buying a commercial property that is also owner-occupied. This approach to investing in your business is within your reach when it comes to SBA/Conventional Loans–and it can easily help you to build your finances while setting yourself up for an even more successful future.

At Cornerstone Capital, we offer industry-leading loan terms and financial insights that we can collaboratively leverage to reach your financial and business ownership goals. One of our expert team members will happily guide you through this process, ensuring your aspirations and needs are met–all you have to do is call.

Key Takeaways: Financing Commercial Properties with Conventional and SBA Loans

  • Understanding Eligibility: Eligibility for SBA loans requires meeting specific criteria as a U.S.-based for-profit business operating in an approved industry, while conventional loans may have stricter credit score requirements.
  • Owner-Occupied Properties: Both SBA 7(a) and SBA CDC/504 loans are exclusively designated for owner-occupied properties, with occupancy requirements ranging from 51% to 60% of the property.
  • Down Payment Considerations: SBA loans generally offer lower down payment options, starting at 10%, compared to conventional loans, which may require higher down payments.
  • Pros and Cons: While SBA loans offer lower interest rates and longer repayment terms, they involve a more complex application process and may have restrictions on fund use. In contrast, conventional loans provide flexibility and potentially lower down payment requirements but lack government backing and support.

Navigating SBA Loans: Understanding Investment Property Restrictions

Considering an SBA loan for your commercial property needs? It’s essential to understand the limitations regarding investment properties. Both SBA 7(a) and SBA CDC/504 loans are exclusively designated for owner-occupied properties, where the business operates from the purchased premises. While the owner must occupy at least 51% of the property, there may be opportunities to lease out the remaining space to other businesses.

For those constructing new commercial properties, occupancy requirements may extend to 60% for the business’s operations. Adhering to these guidelines is crucial to avoid defaulting on your loan. At Cornerstone Capital, we prioritize transparency and compliance, guiding you through the intricacies of SBA lending to ensure your financial success. Before proceeding, consult with your lender to confirm that your plans align with SBA regulations, paving the way for a seamless lending experience.

Who Qualifies For Lending For Owner-Occupied Commercial Properties?

Securing financing for your owner-occupied property through an SBA loan requires meeting specific eligibility criteria. As a U.S.-based for-profit business operating in an approved industry, you must qualify as a “small business” according to SBA standards. While credit score requirements typically start at 620, they may vary based on the loan type and lender preferences.

For SBA CDC/504 loans, businesses must maintain a net worth not exceeding $15 million and demonstrate a net profit of $5 million or less (after taxes) over the previous two years. Meanwhile, eligibility for SBA 7(a) loans hinges on meeting both SBA small business criteria and the specific requirements of the lending institution.

Navigating the complexities of SBA loan eligibility demands careful attention to detail and compliance with regulatory guidelines. At Cornerstone Capital, we’re committed to helping you understand and meet these requirements, ensuring a smooth and successful loan application process. Contact us today to explore your financing options and embark confidently on your journey towards owning your business property.

Owner-Occupied Properties require financial assistance, research, and a solid plan, which is why a woman calculates her financial goals with a calculator.

Understanding Commercial Real Estate Loan Terms

Commercial real estate loans often feature shorter repayment terms compared to residential mortgages. Depending on the type of loan, your repayment term could range from 10 to 20 years. At Cornerstone Capital, we offer flexible financing solutions tailored to your commercial property needs, with terms designed to suit your business goals and financial objectives. Explore our range of loan options and discover the ideal term for your commercial real estate investment.

Comparing Conventional Loans and SBA Loans for Commercial Property Financing

When it comes to financing commercial properties, two popular options are conventional loans and Small Business Administration (SBA) loans. Both offer unique benefits and drawbacks, including considerations regarding down payments. Let’s explore the pros and cons of each to help you make an informed decision.

Conventional Loans for Commercial Property

There are a few options for financing your next commercial property purchase–one of the most traditional of which is the conventional loan. Here’s what to know before you get started down the path of owning a commercial mortgage with a conventional loan.


  • Flexible Terms: Conventional loans for commercial properties typically offer flexible terms, allowing borrowers to customize repayment schedules to suit their financial needs and goals. Terms can range from 5 to 30 years, providing ample time for repayment.
  • Lower Down Payment Requirements: Compared to SBA loans, conventional loans may require lower down payments, making them more accessible for some borrowers. Down payment requirements vary but can start as low as 10% depending on the lender and the specific terms of the loan.
  • Streamlined Process: Conventional loans often have simpler application and approval processes compared to SBA loans, which can be advantageous for borrowers seeking a quicker funding timeline.


  • Strict Eligibility Criteria: Conventional loans may have stricter eligibility criteria, including higher credit score requirements and greater scrutiny of the borrower’s financial history and business plan.
  • Limited Government Support: Unlike SBA loans, conventional loans do not benefit from government backing, which means lenders may be less willing to extend favorable terms or take on higher-risk borrowers.

SBA Loans for Commercial Property

SBA Loans, or Small Business Administration Loans, are one of the best options for growing business owners looking to invest in their company. We’ve listed some pros and cons below.


  • Lower Interest Rates: SBA loans typically offer lower interest rates compared to conventional loans, making them a cost-effective option for financing commercial properties over the long term.
  • Longer Repayment Terms: SBA loans often feature longer repayment terms, with some programs offering terms of up to 25 years. This can help reduce monthly payments and improve cash flow for businesses.
  • Lower Down Payment Options: While down payment requirements vary depending on the type of SBA loan and the lender, SBA loans generally offer lower down payment options compared to conventional loans. For example, SBA 504 loans may require a down payment as low as 10%.


  • Complex Application Process: SBA loans typically involve a more complex application and approval process compared to conventional loans. Borrowers may need to provide extensive documentation and meet strict eligibility criteria set by the SBA.
  • Limited Use of Funds: SBA loans often come with restrictions on how funds can be used, particularly for SBA 504 loans. Borrowers must use the funds for specific purposes, such as purchasing real estate or equipment, which may limit flexibility.

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Down Payment Considerations

For SBA loans, down payment requirements vary depending on the type of loan and the lender. SBA 504 loans typically require a down payment of at least 10% of the loan amount, with some exceptions for startups or special purpose properties. SBA 7(a) loans generally require a down payment of 10% as well, though this can vary depending on the lender.

In contrast, conventional loans may offer lower down payment options, starting at 10% depending on the lender and the specific terms of the loan. This can make conventional loans more accessible for borrowers with limited funds for a down payment.

Choosing between conventional loans and SBA loans for commercial property financing requires careful consideration of your financial situation, business goals, and eligibility requirements. While conventional loans offer flexibility and potentially lower down payment requirements, SBA loans provide lower interest rates and longer repayment terms. By weighing the pros and cons of each option, you can select the financing solution that best aligns with your needs and objectives, ensuring the success of your commercial property investment. 

Best Rates for Owner-Occupied Properties With Cornerstone Capital

Ready to take the next step toward property ownership? Cornerstone Capital stands waiting to help fan the embers of your dreams with our customizable financing solutions. With expertise, personalized service, and commitment to excellence, we’re here to make your homeownership goals a reality. Connect with a finance expert today at 954-434-1296 to learn more about our financing options and discover how we can help you unlock the door to your dream home!


  • 80-90% LTV
  • Rates Starting at 5.5%
  • Terms: 5,7, 10, 15, 25, 30
  • Variable and Fixed Rates
  • Amortization: 25/30 years

SBA - Small Business Administration 90% LTV (Loan To Value)

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