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Commercial Real Estate Financing

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Small businesses struggle to buy real estate as costs keep climbing

Small businesses trying to buy commercial real estate often face steep financial hurdles. One of the biggest challenges is high interest rates, which can make securing affordable loans difficult. When loan costs are high, the monthly payments can stretch a small business’s budget to its limits, making it tough to justify the investment. For smaller businesses, especially those just starting out, this can feel like an overwhelming barrier to owning property.

Then there’s the added complication of shrinking property values in sectors like office and retail space. Vacancy rates are soaring, with offices hitting near-record highs, meaning that small business owners risk buying into a market that’s not as stable as it once was. It’s a bit like buying a car when you know it might lose value the minute you drive it off the lot.

Insurance costs are also spiking, driven by natural disasters and higher construction costs. In some areas, premiums went up as much as 17%. Add that to the mix, and buying a property for your business can feel more like an obstacle course than an investment opportunity.

SBA Loan for Commercial Real Estate Financing

Owning property can stabilize your business expenses and build financial equity

For small businesses facing challenges securing commercial real estate financing the SBA loan program can be a life saver. SBA 504 and 7a loans are specifically designed to make real estate more affordable by providing low-interest, long-term financing. This can help ease the burden of high monthly payments, allowing small businesses to focus on growth instead of scrambling to meet steep financial obligations.

The SBA 504 loan is a great option for businesses looking to purchase fixed assets, like commercial real estate, at affordable rates. With a 10% down payment and the option for up to 25-year repayment terms, this program helps spread out costs, making property ownership more achievable for small businesses. On the other hand, the SBA 7a loan provides flexibility, covering not only real estate but also other business expenses like renovations or working capital—perfect for businesses still finding their footing.

First Bank of the Lake is a recognized leader in SBA lending, with a strong track record of helping small businesses succeed. With over $1.1 billion in SBA loans funded, they understand the complexities of the commercial real estate market and provide hands-on, personalized support to guide businesses through the financing process.

The Numbers

in Loans 2024

Largest SBA Lender^

Small Businesses Helped 2020-2024

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The First Bank of the Lake rep and I bonded over faith, fishing and finance. They got my loan done in under 30 days in very, very trying circumstances.

Issac Reed
President, Reed’s Moving Services

If we ever need business capital, my first call would be to First Bank of the Lake. Why would I look elsewhere?

Barry Norfleet
Co-founder, Lifetime Green Coatings - Kentucky