Can an SBA loan be used to refinance debt?
Can SBA loans be used to finance apartment projects or other rental properties?
SBA loans are commercial loans that are used for businesses that are “actively” operated for profit. Apartments and other rental properties are considered to be “Passive Investment” properties and are not eligible for financing under SBA regulations.
An actively operating business may be used to acquire, and/ or improve real estate if the business will occupy the majority of the building. The business must occupy 51% or more of existing real estate, or 60% of the real property if proceeds of the SBA loan will be used to construct new improvements.