Commercial mortgage loans for the purchase, new construction or refinance of commercial properties account for the largest volume of SBA loans. The property must be "owner occupied." In other words, the business must occupy at least fifty-one percent of the space if it is an existing facility or two-thirds if it is new construction. The balance of the space can be leased to third parties. This program is very popular for three reasons: 1. Loan amounts can be up to 25 years with no balloon provisions (as is customary with conventional loans); 2. The amount financed can be as much as ninety percent and occasionally higher (versus seventy to seventy-five percent on a conventional basis); and 3. The loan can be assumed by an SBA eligible borrower.
