SBA Office Acquisition Loan | 100% Financing, Zero Equity

The borrower had identified a Class A office building available through a discounted payoff, a property that would carry a significantly higher price tag in a standard market transaction. The opportunity was time-sensitive and the seller required a clean, efficient closing process. The borrower's priority was ownership without capital commitment: any equity injection requirement would have eliminated the transaction entirely.

The SBA 7(a) owner-occupied program allows 100% financing for eligible owner-occupants, but properly structuring the transaction requires specific attention to how the real estate entity and the operating business are organized and how the lease between them is documented. SBA compliance requires that the Eligible Passive Company (the entity that will hold the real estate) and the Operating Company (the business that will occupy and operate from the space) are structured correctly, with a lease that meets SBA term and payment requirements. Getting that structure in place correctly from the start is what determines whether the transaction clears SBA approval or stalls in underwriting.

Beyond the entity structure, the full capital stack (not just the real estate purchase but FF&E, post-closing working capital, and all transaction closing costs) needed to be housed within the SBA facility. A conventional acquisition loan would not accommodate that scope. The 100% SBA program, properly structured, does.

• Borrower required 100% financing with zero equity contribution; any out-of-pocket capital requirement would have terminated the deal
• Time-sensitive discounted payoff opportunity required efficient execution without complexity that would create delays
• SBA-compliant EPC/OC entity structure needed to be established and documented correctly before the lender could proceed to approval
• Full capital stack (real estate, FF&E, working capital, and all closing costs) needed to be accommodated within a single SBA 7(a) facility
• Third-party diligence requirements (appraisal, environmental, title) had to be coordinated and delivered within the lender's timeline

Cornovus Capital structured the transaction as a 100% SBA office acquisition loan under the SBA 7(a) owner-occupied program. The full capital stack was sized and documented across every eligible use: real estate acquisition at the discounted payoff price, FF&E for the new space, post-closing working capital, the SBA guaranty fee, and all estimated closing costs. The borrower's equity contribution was zero. Every dollar of project cost was financed within the SBA facility.

The EPC/OC entity structure was established and documented to SBA requirements. The Eligible Passive Company lease to the Operating Company was structured with the term length and payment parameters SBA regulations require. This is a critical step that, when done incorrectly, creates approval delays or disqualifies the transaction entirely. With the entity structure clean and the uses of proceeds fully documented, the submission to the SBA lender was straightforward and complete.

Third-party diligence (appraisal, environmental assessment, title commitment, and lien searches) was coordinated and delivered within the lender's required timeline. The loan was submitted to SBA, approved, and moved to closing without structural modification.

• Structured the full 100% SBA 7(a) facility covering real estate purchase, FF&E, working capital, and all closing costs with zero equity from the borrower
• Established and documented the EPC/OC entity structure with an SBA-compliant lease between the passive company and the operating business
• Sized the capital stack across all eligible project uses to maximize the program's coverage and eliminate out-of-pocket exposure
• Coordinated all third-party diligence reports within the lender's required timeline
• Delivered a clean, SBA-ready submission that moved from approval to closing without modification

The SBA office acquisition loan closed with 100% of project costs financed and zero equity contribution from the borrower. The business acquired a fully finished Class A office building at a discounted payoff price, entering ownership at below-market basis with no capital at risk. The 25-year fully amortizing structure at Prime plus 2.75% provided a predictable long-term debt service profile, and the borrower moved immediately from paying rent on space it did not own to building equity in space it controls outright.

The transaction is a direct illustration of the SBA 7(a) owner-occupied program performing as designed: a qualified business owner identifies the right property at the right time, the program eliminates the equity barrier to ownership, and the result is a transition from tenant to owner with no capital at risk and below-market basis locked in at closing.

• 100% financing closed with zero equity injection from the borrower
• Full capital stack funded: CRE acquisition, FF&E, post-closing working capital, and all closing costs
• Class A office acquired at discounted payoff price, below open-market value
• 25-year fully amortizing structure at Prime plus 2.75%
• EPC/OC entity structure established and executed in compliance with SBA program requirements
• Borrower transitioned from tenant to owner with below-market acquisition basis and no out-of-pocket capital

Additional financing outcomes are available in our Transaction Highlights archive.