Rent Replacement
If you currently lease your business location, SBA financing can sometimes replace rent with an ownership payment. When business owner-occupancy meets program rules—51%+ for existing buildings and 61%+ for new construction—your historical rent can help support an ownership structure, including scenarios with up to 100% financing when eligibility and credit conditions align.
How Rent Replacement works
- Map occupancy: confirm the usable square footage you will occupy now and within the SBA timeline (51% existing; 61% new construction).
- Translate rent to ownership cost: compare current lease payments to projected SBA principal & interest, taxes, insurance, and maintenance.
- Program fit: select SBA 7(a) or CDC/504 based on property type, budget, and term structure.
- Underwriting view: show the ability to repay with pro-forma DSCR and a clean sources/uses table.
When up to 100% financing may be possible
In certain SBA-eligible scenarios, if the projected ownership payment is near your historical rent and overall credit strength supports it, lenders may consider up to 100% financing for business owner-occupied real estate. This is case-by-case and subject to lender policy, collateral, cash flow, and program rules.
Why owners pursue Rent Replacement
- Stabilize occupancy cost with a fixed or predictable payment profile
- Build equity instead of paying a landlord
- Control your space for growth and improvements
- Potentially lower down payment compared to conventional options
Use-case examples
Existing building purchase (51%+ occupied at closing)
A manufacturer buys its current leased facility, immediately occupying more than half the space. The projected SBA payment is near prior rent, enabling a strong Rent Replacement case.
New construction with phased occupancy to 61%+
A medical practice builds a new clinic and reaches 61%+ business owner-occupancy at completion. SBA 504 provides long, fixed-rate terms on the CDC portion to stabilize costs.
Our approach
- Pre-qualification & occupancy mapping: confirm eligibility, square-footage plan, and program fit.
- Rent-to-own analysis: compare lease cost to projected ownership payments with sensitivity cases.
- Packaging: underwriter-ready narrative, sources/uses, DSCR view, and evidence of occupancy.
- Lender match: we primarily work with Preferred SBA Lenders (PLP) to help shorten review cycles.
FAQs
Do I need to occupy the whole building?
No. SBA focuses on business owner-occupancy thresholds: 51%+ for existing buildings; 61%+ for new construction.
Is 0% down always available?
Not always. Up to 100% financing can be considered case-by-case depending on program fit, cash flow, collateral, and lender policy.
Which program is better for me—7(a) or 504?
It depends on property type, size, and goals. We’ll map the trade-offs—term, rate, fees, and amortization—so you can choose confidently.
Get started
Share your current rent, space needs, and timing. We’ll assess eligibility and outline a practical Rent Replacement plan.
All financing is subject to credit approval, program availability, and lender guidelines. Terms and timelines are not guaranteed and may change without notice.