Question 1

What kind of San Marcos business is buying its own building with SBA money?

Accepted Answer

Mostly the visitor-facing and campus-serving operators, and the city's own tax collections are the sourced measure of that base. San Marcos collected $3,317,669 of city hotel occupancy tax at 7% in fiscal 2025, plus $952,105 of chapter 334 venue tax at 2%, implying roughly $47.4 million of taxable lodging receipts for the year. That is a real, documented lodging and hospitality economy behind a 7(a) or 504 purchase, alongside the medical office, retail, and service tenancy around the campus. Local 7(a) and 504 volumes for Hays County were not published, and Hays County's SBA district office assignment is not something we could confirm, so ask us to verify which district your file routes through before you plan around it.

Question 2

Does buying commercial property near campus mean the university could later force a sale?

Accepted Answer

No, and in one recent case the city wrote the opposite into the approval. When San Marcos City Council approved the Emerge Here Phase 2 development in June 2026, it attached a covenant barring sale to a non-tax-paying entity, including the university, for 12 years. That is the city protecting its own tax roll from campus expansion, not a blanket rule, but it shows how seriously San Marcos treats keeping commercial parcels near campus on the tax rolls. Ask your CPA or attorney about any covenant attached to a specific parcel before you buy.

Question 3

If I build new instead of buying an existing building near campus, what does SBA require?

Accepted Answer

At least 60% of the building must be occupied by your own business at closing, with no more than 20% permanently leased to others and an absorption plan for the rest, under 13 CFR 120.131. Buying an existing building only requires 51% occupancy, so the build-new path narrows how much of the space you can lease out to help carry it. Price the site work into the same decision: over the Edwards Aquifer, TCEQ's own timeline runs up to 30 days of administrative review plus 90 days of technical review before ground is disturbed, and San Marcos is resetting its water and wastewater impact fees this quarter without a final adopted number yet.

Question 4

How much cash do I need to put down on an SBA 504 loan for a specialized building?

Accepted Answer

10% is the standard, but plan for more if the building is single-purpose. SBA 504 borrower contribution is 10% for an ordinary building, 15% if the business has operated under two years or the building is single-purpose, and 20% if both apply, under 13 CFR 120.910. Whether SBA treats your particular building as single-purpose is a determination made on the file, not something the local zoning label settles, so talk to your CPA and your loan advisor about how your building type affects the down payment before you size the deal.

Question 5

Is the SBA 504 loan cap $5 million or $5.5 million for a San Marcos purchase?

Accepted Answer

$5 million, for almost every San Marcos borrower. The 504 project cap is $5 million standard, and the $5.5 million cap applies only to small manufacturers and qualifying energy projects, under 13 CFR 120.931. No manufacturing concentration was sourced for the San Marcos market specifically, so size the deal to the standard cap unless the business qualifies under one of those two carve-outs.

Question 6

Are SBA fees still waived for fiscal year 2026?

Accepted Answer

No, fees were reinstated for FY2026. For loans approved between October 1, 2025 and September 30, 2026, 7(a) loans carry an upfront guarantee fee of 2% to 3.5% or more depending on loan size, and 504 loans carry a 0.50% upfront fee plus a 0.209% annual fee, none of which applied in FY2025. Small manufacturers still get relief: 7(a) loans of $950,000 or less carry no upfront fee, and 504 fees are waived for them. Any claim that SBA fees are waived across the board is out of date as of this fiscal year.

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