How is private (hard money) lending different from a bank loan?

We are asset-based, which means we underwrite the property, its equity, and your business plan rather than your personal income and tax returns. That lets us fund in days instead of the 30 to 60+ days a bank takes, on short interest-only terms built around a flip, refinance, or sale. You pay a higher rate than a bank in exchange for speed, flexibility, and certainty on deals a bank cannot fund in time.

How fast can you close?

Fix and flip and residential bridge loans typically close in 5 to 7 days once we have your basics. Rental (DSCR) loans usually take 2 to 3 weeks because of the appraisal and rent verification, and SBA financing runs 30 to 90 days. The biggest variable is how quickly title, insurance, and your documents come together.

Do you check credit, and is there a minimum score?

We do run credit, but on our asset-based loans it carries far less weight than at a bank, and weaker credit can often be offset with a larger down payment or lower leverage. There is no personal income test on these programs. Credit matters most on long-term rental loans, where we look for a 640 minimum and it affects your rate and leverage.

Do I need to provide income documents or tax returns?

Generally no. Our bridge, fix and flip, and construction loans qualify off the property and your equity, and our DSCR rental loans qualify off the property's rent, so we do not ask for W-2s or pay stubs. We will want to see bank statements or proof of reserves. SBA and conventional investment loans are the exceptions and are fully documented.

What do you need to give me a quote?

Just the basics of the deal: the property address or type, the purchase price or current value, your rehab budget, the loan amount, and your exit plan. We can often pre-qualify you over the phone or through a short application and issue a proof-of-funds letter before you are even under contract.

What is a point, and how do your rates compare to a bank?

A point is an upfront fee equal to 1% of the loan amount, and origination on private loans typically runs 1 to 3 points. Our rates are higher than a bank, generally in the high single digits to low teens depending on the program, because the loans are short, fast, and flexible. When you compare offers, weigh the rate and the points together as your true cost of capital.

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SBA · 5 min read

SBA 504 Loans for Owner-Occupied Commercial Real Estate

The short answer

The SBA 504 loan finances owner-occupied commercial real estate with a low down payment and fixed rate. How it works, who qualifies, and how it beats 7(a).

The SBA 504 loan is purpose-built for a business buying or building the commercial property it operates from. It pairs a low down payment with a long-term fixed rate, which makes it one of the best tools for an owner-user who wants to stop paying rent and build equity.

How the 504 structure works

A bank or lender funds roughly 50% of the project in first position.
A CDC (Certified Development Company) funds about 40% with a long-term fixed rate, backed by the SBA.
You contribute the remaining down payment, often around 10%.

Who qualifies

An operating business that will occupy at least 51% of an existing building (or 60% of new construction). The property is the collateral and the business is the borrower, so the deal is judged on both.

504 vs 7(a)

The 504 is the better fit for real estate and heavy equipment with its long fixed rate. The 7(a) is more flexible, covering business acquisition, working capital, and partner buyouts under one note. Many owner-users qualify for both, and the right choice depends on what you are financing.

The tradeoff

SBA financing takes 30 to 90 days and is fully documented. In exchange you get a low down payment and a long-term cost well below bridge pricing. If you need speed now, a bridge loan can close the deal and refinance into SBA later.

Frequently asked

What can an SBA 504 loan be used for?

Owner-occupied commercial real estate and heavy equipment. It is built for a business buying or building the property it operates from, not for pure investment real estate.

How much do I put down on an SBA 504 loan?

Often around 10%, rising to 15% to 20% for startups or special-purpose properties. A bank funds part of the deal and a CDC funds the long-term fixed-rate portion.

What is the occupancy requirement for SBA 504?

Your business must occupy at least 51% of an existing building or 60% of new construction. That owner-occupancy rule is what separates SBA-eligible deals from investment property.

Rates, leverage, and timelines mentioned in this guide are typical figures, subject to underwriting and market conditions. Not a commitment to lend. Nothing here is legal, tax, or investment advice.

Related programs

SBA Financing CRE Permanent

Compare your options

SBA 7(a) vs Conventional Loan CRE Bridge vs CRE Permanent Loan

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