SBA 504 financing is designed for owner-occupied commercial real estate (and equipment). However, leasing a portion of the commercial space is allowed. To be eligible, the borrower must meet SBA’s requirements below:
SBA 504 is used to directly assist small businesses, which is the reason for SBA’s distinct leasing guidelines. These requirements basically eliminate using SBA 504 to finance strip malls, as they are typically not owner-occupied. Condominium units are becoming more popular and would be eligible under this program.