Question 1

South San Francisco lab vacancy is high right now. Does that make an SBA purchase a good idea?

Accepted Answer

It changes the conversation from renting to owning, at a price that reflects the correction. Bay Area life science vacancy hit 29.0% in the first quarter of 2026, total availability was 32.3%, asking rent has fallen for six straight quarters to $5.57 a square foot NNN, and no new lab space is under construction or expected to break ground. That is not the boom South San Francisco's own economic development page still advertises; it is a repositioning market. An owner-user buying under SBA's 51% occupancy rule for an existing building is buying into that softer pricing rather than betting on a lab lease renewal at a landlord's terms. If your SBA file needs more time than the seller will give you, a bridge loan can carry you to closing while the SBA lender underwrites.

Question 2

How much do I actually need to put down on a 504 loan for a San Mateo County building, and does a lab or biotech company get a bigger loan?

Accepted Answer

Ten percent is the floor, not the number every buyer gets. Under 13 CFR 120.910, a borrower contributes 10% on an ordinary project, 15% if the business has operated less than two years or the building is single purpose, and 20% if both apply. A small manufacturer under NAICS 31-33, which a biologics or life-science production business may qualify as, gets a $5.5 million 504 cap instead of the standard $5 million under 13 CFR 120.931, which matters in a submarket built around biotech production space. Whether a specific business meets that definition is an SBA lender's call, not ours. At San Mateo County's basis, even the 10% floor is a real dollar figure to plan for before you go to underwriting.

Question 3

I heard SBA fees are waived this year. Is that true for a 2026 San Mateo County closing?

Accepted Answer

No, and budgeting on that assumption will leave you short at the closing table. SBA fees were reinstated for fiscal year 2026, covering any loan approved between October 1, 2025 and September 30, 2026: 7(a) upfront fees now run 2% to 3.5% or more by loan size, after running at zero under $1 million in fiscal 2025, and the 504 upfront fee went from zero to 0.50% while its annual fee was cut to 0.209%. Small manufacturers still get a break: 7(a) loans of $950,000 or less carry no upfront fee, and 504 fees are waived for that category. On a Peninsula acquisition, factor that fee in alongside recording and transfer tax costs (below) rather than assuming last year's zero-fee terms still apply.

Question 4

Will my property tax bill on a San Mateo County building I buy match what the seller was paying?

Accepted Answer

No. Under Proposition 13, your assessment resets to the price you pay the day you take title. A seller who has held the building for decades may be carrying an assessment far below market value, but your bill starts fresh at your purchase price plus voter-approved debt and any special assessments in your Tax Rate Area. Expect a supplemental bill for the mid-year gap between the seller's old assessment and your new one, and note that San Mateo County gives you only 60 days from the mailing date on that supplemental notice to appeal it, separate from the July 2 to November 30 window for a regular annual appeal.

Question 5

Does it matter which San Mateo County city my target building is in for closing costs?

Accepted Answer

Yes, and one city stands apart. County documentary transfer tax is $1.10 per $1,000 of price everywhere in San Mateo County. The City of San Mateo adds its own Measure CC tax on top: 0.5% of the full price below $10 million, and 1.5% at $10 million or more, applied to the entire consideration rather than just the excess. Redwood City, Burlingame, Menlo Park, South San Francisco, San Bruno, Foster City and Millbrae all charge only the bare county rate. A building just inside San Mateo city limits carries a materially higher transfer tax bill than the identical building a few miles away, so confirm the jurisdiction before you budget your closing costs.

Question 6

My business leases in Redwood City or Menlo Park. Is there a local reason to buy instead of renew?

Accepted Answer

The honest answer is that we have no Redwood City or Menlo Park office market data to point you either way. The only Peninsula commercial market figures we can source are for Bay Area life science space, and no office rent, vacancy, or cap rate series for those two cities was available to us, so anyone telling you the county's numbers favor buying is not working from a source. What we can say about the structure is general: occupying your own building takes you out of the tenant-side lease renegotiation and lets an SBA loan's fixed, long-term payment replace an open-ended rent line, at the cost of a down payment and a 51% occupancy obligation. Run that against your actual lease renewal terms with your CPA rather than assuming it in either direction.

Question 7

What is the difference between an SBA 7(a) and a 504 loan?

Accepted Answer

The 7(a) is the flexible, all-purpose SBA loan: owner-occupied real estate, business acquisition, partner buyouts, equipment, and working capital under one note. The 504 is purpose-built for owner-occupied commercial real estate and heavy equipment, with a long-term fixed rate and a low down payment. We place both and match your scenario to the right one.

Question 8

How much can I borrow, and how much do I put down?

Accepted Answer

SBA loans go up to $5M, with larger total project sizes possible on the 504 since a bank funds part of the deal. Down payments are low, often around 10%, rising to 15% to 20% for startups or special-purpose properties. On the right deal we finance up to 90%.

Question 9

What are the terms and rates?

Accepted Answer

Terms run up to 25 years for real estate, which keeps payments low. 7(a) rates are usually variable and tied to the Prime rate, while the 504 carries a long-term fixed rate on the CDC portion. Because we place your file across 20+ SBA lenders, we shop your scenario for the strongest terms.

Question 10

Do I have to occupy the property?

Accepted Answer

Yes. SBA real estate loans require owner-occupancy, at least 51% of an existing building or 60% of new construction. That requirement is what separates SBA-eligible deals from pure investment property, which fits our other programs.

Question 11

Do I have to personally guarantee an SBA loan?

Accepted Answer

Yes. The SBA requires a personal guarantee from anyone who owns 20% or more of the business, and on real-estate deals the loan is also secured by the property. This is standard on every SBA loan, not a sign of a weak file, and it is part of why SBA financing offers low down payments and long terms. We will walk you through exactly what you are signing before you commit.

Question 12

How long does an SBA loan take to close?

Accepted Answer

SBA loans are slower than our bridge products, typically 30 to 90 days, because of the documentation and approval process. The tradeoff is a much lower long-term cost. If you need speed now, we can bridge the deal and refinance into SBA later.

Question 13

What do you need to get started?

Accepted Answer

Generally two to three years of business and personal tax returns, business financials, a personal financial statement, and details on the property or business. We will tell you exactly what is needed and place your file with the best-fit lender in our network.

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