No. You can still finance real estate with the business, but as of October 2026, under SBA SOP 50 10 8.1, only the real estate portion can run up to 25 years, while the business portion is capped at 10. The loan must be either two separate loans or one loan with a blended maturity weighted by each use's share. On a $5 million loan with $2 million for the business and $3 million for real estate, the blended term is about 19 years.
Under the earlier SOP 50 10 8, a change-of-ownership loan with at least 51% of proceeds going to commercial real estate could take a 25-year maturity on the whole loan, per Starfield & Smith. That shortcut is gone. SOP 50 10 8.1 applies to loans numbered on or after October 1, 2026, per SBA Information Notice 5000-880695.
A loan that buys the business and the property must now be structured one of two ways:
Accredited reports that the weights are set before the buyer's equity is applied.
Assumptions: a $5,000,000 loan, $2,000,000 for the business and $3,000,000 for real estate, at 10% for every part, with monthly payments. Real estate is 60% of proceeds, so the old 25-year shortcut would have applied. A real estate rate may differ in practice.
The blended loan raises the payment by about $43,535 a year, or 8%, against the old method. Two loans raise it by about $99,074, or 18%. Starfield & Smith uses the same 60/40 split to reach 19 years and notes that the blended loan has the lower monthly payment of the two options.
Coverage at 1.25x then needs about $735,944 of cash flow for the blended loan and about $805,368 for two loans. The old method needed about $681,526.
If the real estate were less than half of the proceeds, the old rule would not have given the whole loan 25 years either. Accredited gives a $3,000,000 business and $2,000,000 real estate split that blends to about 16 years.
It depends on coverage. The blended loan has the lower payment. Two loans keep each use at its own maturity. Starfield & Smith suggests lenders compare both early where coverage is tight. Ask yours to run both.
No. The $3 million threshold for a lender-commissioned quality of earnings report excludes the appraised value of owner-occupied commercial real estate, per CLA and Cantrell Law. A deal can pass or fail that threshold depending on how the price is split.
The 10-year cap is on the business portion only. The real estate portion keeps its 25 years.
Where these numbers come from: Maturity rules are from SBA SOP 50 10 8.1 as summarized by Starfield & Smith and Accredited. The QoE threshold is from CLA and Cantrell Law. Listing data is from BigIdeasDB and 504 notes are from Matthews. Payment factors are standard amortization at 10%. Confirm current terms with an SBA lender.
Yes. As of October 2026, the real estate portion of a change-of-ownership loan can have a maturity of up to 25 years, per Starfield & Smith. The business portion is capped at 10 years.
No. It is a maximum set by SOP 50 10 8.1 for the business acquisition portion, and Accredited reports that the business portion cannot carry a balloon.
It can raise total project costs, and the 10% injection is measured on total project costs. Ask your lender how it treats the property in the injection.
To see how the payment feeds the lender's limit, read how banks size the loan: How much will a bank lend to buy a business?
Meraki Dealmakers is a service of Meraki Partners, LLC, an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm. This article is general information, not legal, tax or investment advice.
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Meraki Dealmakers is a service of Meraki Partners, LLC.
Meraki Partners, LLC is an advisory firm. It is not a broker-dealer, investment adviser, business broker, law firm or accounting firm, and does not solicit investors or receive compensation based on capital raised.
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