SBA 504 Loan Changes 2026: More Commercial Buyers Qualify and Values Could Rise

By Marc Perlof | MarcRetailGuy

January 5, 2026

If you own commercial real estate, here’s what just changed for you.

In 2026, the SBA quietly made a significant change that affects who can purchase your property and how transactions are completed. Access to SBA 504 loans (owner user loans) is increased by revised citizenship and residence requirements introduced in the SBA SOP 50 10 8 update. This is significant since the market for small and mid-sized commercial assets is mostly driven by SBA financing.

This is the overall view. More purchasers are now eligible. Under the updated SBA 504 rules, buyers can now include up to 5 percent ownership by certain foreign nationals or conditional permanent residents. Many otherwise strong buyers were left out prior to this shift. A larger group of eligible owner-users can now apply under the SBA 504 foreign ownership eligibility regulations.

Clarity is another benefit of this move. The SBA 504 rules use the IRS definition of a principal residence. As a result, there is less misunderstanding, underwriting happens quicker, and there is less chance of transactions collapsing at the end of the process.

It's easy to understand why commercial property owners care about this. Pricing is determined by financing. Competition increases as more purchasers are eligible. Better terminology and stronger values are supported by this.

More importantly, clearer rules mean fewer surprises in escrow. Less friction. Fewer price changes. Fewer broken deals due to financing issues discovered too late.

These changes are already influencing how I’m structuring pricing guidance, buyer targeting, and deal timelines for commercial property owners planning 2026 exits.

Here is what commercial property owners should understand right now.

• SBA 504 loans typically require only about 10 percent down from the buyer, compared to 25 percent to 35 percent for conventional bank loans, based on SBA program guidance as of 2024¹.
• The SBA 504 program supports owner-occupied properties where the operating business occupies at least 51 percent of the space for existing buildings or 60 percent for new construction, per SBA rules².
• SBA 504 loans can finance projects up to approximately $5 million per loan, with higher limits for certain public policy goals, according to SBA program documentation³.

These rules apply to all SBA 504 applications approved on or after January 1, 2026. That means deals being planned today for 2026 closings should already be structured with these changes in mind.

Key takeaways supported by SBA guidance.

• Expanded buyer eligibility increases the pool of qualified commercial owner-users¹.
• Clearer residency definitions reduce underwriting friction and deal risk².
• SBA 504 loans remain one of the most equity-efficient tools for owner-user commercial real estate buyers³.

If you own commercial real estate and are thinking about selling, refinancing, or planning a 2026 exit, this update directly affects your strategy. Buyer demand is not just about the market. It is about who can get loans and on what terms.

If you want to understand how these SBA changes affect your buyer pool, pricing range, or timing for a 2026 sale, reach out.

With these new SBA 504 loan changes expanding eligibility, how might a larger and better-capitalized buyer pool change the value of your commercial property?

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