Question 1

Which SBA office covers Merced County?

Accepted Answer

The SBA Fresno District Office. Its territory covers 15 counties, including Merced, Madera and Stanislaus. We arrange and place SBA financing through our network of partner lenders and are not ourselves an SBA lender. We could not find local 7(a) or 504 loan volumes for Merced County, so we make no claim about how active either program is here.

Question 2

How much of the building must my business occupy?

Accepted Answer

51% of an existing building, and 60% of new construction. Under 13 CFR 120.131, a new building also limits permanent leasing to 20%, with a 3-year and 10-year absorption plan for the rest. "Sixty percent and rent the rest" is the common mistake. A Merced County owner buying a food-processing, manufacturing or distribution building to run their own operation fits the occupancy test only if the business fills enough of it. Confirm the percentage with the SBA lender before you contract.

Question 3

What are the 504 loan limit and my equity contribution?

Accepted Answer

$5 million standard, $5.5 million only for small manufacturers and qualifying energy projects, with 10%, 15% or 20% down. The limit is in 13 CFR 120.931, and the SBA's own web page contradicts it, so we cite the regulation. The 504 portion is at most 40% of the project (120.930). Your contribution is 10% in the ordinary case, 15% if the business has operated under two years or the building is single-purpose, and 20% if both (120.910). On a $1,000,000 project that is $100,000, $150,000 or $200,000. "Just 10% down" without those carve-outs is the classic 504 mistake.

Question 4

Did SBA fees come back?

Accepted Answer

Yes. For fiscal year 2026, loans approved October 1, 2025 through September 30, 2026, the SBA reinstated upfront fees. The 7(a) upfront fee is 2% to 3.5% or more by loan size, where loans under $1 million had been at 0% in fiscal 2025, and the 504 upfront fee is 0.50%, where it had been 0%. Small manufacturers are treated differently: 7(a) loans up to $950,000 carry 0% upfront and 504 fees are waived. Fiscal year 2027 began October 1, 2026, so confirm the current schedule with the lender.

Question 5

Who can own the business, under the 2026 citizenship rule?

Accepted Answer

Only U.S. citizens and nationals, with a U.S. principal residence. Effective March 1, 2026, SBA Policy Notice 5000-876441 requires 100% of direct and indirect owners to be U.S. citizens or nationals residing in the U.S. Lawful permanent residents may not own any percentage. The posted standard operating procedure still shows the older text, and the notice governs. Check every owner in the chain before you apply.

Question 6

What does it cost in tax to buy a building in Merced County?

Accepted Answer

Your purchase price resets the assessed base under Proposition 13, then growth is capped at 2% a year. The county's 2026-27 stacks run from about 1.04% to 1.16% by school district, so a $1,000,000 building in Merced City School District territory carries about $11,105 a year ($1,000,000 x 1.1105%). A new City of Merced build pays impact fees at certificate of occupancy, such as $6,279 per 1,000 square feet of industrial space. Owner-user industrial at Castle sits in an Opportunity Zone, and the county states an adopted environmental report covers projects there. Talk to your CPA.

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