SBC
A single-user office, automotive, warehouse, retail or light industrial building at or above 25,000 square feet of gross building area is treated as Special Purpose under our SBC program, and Special Purpose is ineligible collateral. But a change effective 07/10/2026 says multi-tenant properties may exceed 25,000 SF as long as no individual tenant occupies 25,000 or more. The test is tenant concentration, not building size.
August 31, 2026
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Our guideline sets no published experience tier for self-storage operators - storage experience is evaluated case-by-case. What is fixed is the investor experience table that caps an inexperienced borrower at 70% LTV, the property management requirements, and the rule that only traditional self-storage counts as the property type. Income from outside storage - RV, boat and trailer parking - gets no credit toward net operating income, which resizes the loan on any facility earning from an open lot. This is a conventional property-secured loan, not an SBA product.
August 31, 2026
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When your business occupies part of a commercial building and arm's-length tenants occupy the rest, and your share of the net rentable area falls below the owner-occupancy threshold, the property is classified as an Investor Property. There is a real benefit buried in that classification: for these partial owner-occupied properties, the standard investor experience requirement does not apply. This page explains how the classification works, why the carve-out exists, and the several experience-related requirements it does not reach.
August 31, 2026
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Buying a building to move your business into and closing your current location is eligible, but it is approved case-by-case: the operational impact has to be minimal and the move must not significantly disrupt operations. There is no relocation checklist in the guideline, and anyone who hands you one made it up. What actually decides the file is continuity of revenue and staff, the 50% owner-occupancy test at the new address, your business experience, and whether global cash flow still works after the move.
August 31, 2026
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A second location is financeable under our owner-occupied program, but the approval is carried by the business you already run. Expansions are acceptable when the new site — in the same state or a different one — comes online with minimal start-up time, places no undue burden on the existing location, and has a management plan where owner involvement or travel would be significant. The existing location serves as the primary source of income for approval, which is why a pro forma for the new site is not the qualifying document.
August 31, 2026
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On an owner-occupied deal, experience is measured in years in your business or industry, not in real estate. Under three years you are Inexperienced and capped at 70% LTV; three years or more puts the program maximum back on the table. Ownership, operational and employment experience all count, and the guideline is silent on where those years were earned. Expansions, relocations and new ventures are each assessed under their own provision.
August 31, 2026
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Not through our program. 501(c)(3) organizations and non-profits are named ineligible borrowers, because the program lends to for-profit entities wholly owned by individuals and requires a personal guaranty from the people who own them. A nonprofit has no owners, so there is nobody to sign. This page explains the mechanism, the separate property-type problem churches and schools run into, and the categories of lender built to serve nonprofits.
August 31, 2026
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You can self-manage a property you are financing, but only if you clear two gates at once. A commercial property requires the borrower or guarantor to live within 200 miles of it; a Tier I Multi-Family or Tier I Mixed-Use property tightens that radius to 50 miles. Both paths also require minimum investor experience. One discretionary override exists for owners who can verify 5 plus years of like-kind, like-size, like-geography experience.
August 31, 2026
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Above $1 million, our SBC program requires guarantors to show net worth at least equal to the loan amount. Below that threshold the test is not run at all. The trigger is the loan size or your total exposure to us, the evidence is a personal financial statement, a recent liquidity statement or a CPA-certified net worth, and the combined figure across all guarantors is what counts. It is a different test from post-closing reserves, which are measured in months of P&I and must be liquid.
August 31, 2026
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A third-party property manager has to produce two things for the loan file: an executed property management agreement with a term longer than one year, and, when the manager is an individual rather than a company, a resume showing at least two years of experience managing income-producing property. A manager confirmed to be a licensed real estate agent or broker does not need the resume. That is the whole list. The agreement term is what most often stalls a file, because month-to-month forms are common and do not clear the test.
August 31, 2026
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Yes. Under our Small Balance Commercial guidelines, any manager or controlling holder who does not hold a membership interest may be required to sign a personal guaranty, and all parties which control the borrower fall inside the background review regardless of ownership. A controlling holder is anyone with the authority to direct the entity or act on its behalf without unanimous or majority member consent. This page explains how that test is applied in practice, what signing pulls in, and where the guideline is genuinely silent.
August 31, 2026
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Anyone who owns 25% or more of the borrowing entity, directly or indirectly, will be required to execute a personal guaranty. If no single member reaches 25%, the guaranty is typically signed by multiple members who in aggregate own at least 51%. Managers and controlling holders who own nothing can be pulled in too, and liability cannot be capped at your share of the entity.
August 31, 2026
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Usually you cannot. Our Small Balance Commercial program will not lend when the borrower or a guarantor resides in the residential component, and the prohibition is written by state and unit count: Multi-Family or Mixed-Use of 6 units or fewer in New York and New Jersey, Multi-Family or Mixed-Use of 5 units or fewer everywhere else. Where a borrower does reside in a unit, it can flip the file into Owner Occupied classification and requires a Loan Purpose Analysis Worksheet. Consumer-mortgage law questions belong with your attorney.
August 31, 2026
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Commercial mortgages are made to for-profit legal entities wholly owned by individuals, not to a person in their own name. Under our Small Balance Commercial program the borrower must be a US-domiciled LLC, LP, partnership, corporation or revocable trust, with natural person members and in good standing. In New York, in New Jersey on smaller mixed-use and multi-family, and for fewer than five residential properties elsewhere, we are prohibited from lending to an individual at all. Here is what the entity has to be, what it does not protect you from, and what you will have to prove.
August 31, 2026
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A commercial lender judges a building on the appraiser's condition rating and the repair items listed with it. An appraiser rating of Fair triggers an additional review before the property can be called acceptable. Deferred maintenance that rises to a life-and-safety issue may be a reason to decline, and where the loan proceeds, evidence of repair is required before closing. Holdbacks exist for reasonable repairs, cannot exceed 180 days, and are not available for structural work, new construction, or retrofit.
August 31, 2026
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A commercial property can be in fine shape and still be declined for what stands around it. Our SBC guidelines state that regardless of the subject property's own condition, the property is ineligible if other properties within a two-block radius are vacant, abandoned or boarded. The test is about marketability and exit, not aesthetics, and it arrives in your file from three separate directions. This page covers the exact language, what it leaves open, and what a borrower can realistically do about it.
August 31, 2026
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If your building is zoned legal non-conforming, we may require Ordinance and Law coverage - a combination of Coverage A, B and C - on the property policy, as determined on your file. Coverage A addresses the value of the undamaged portion, B the cost of demolishing it, and C the increased cost of rebuilding to current code. Our guidelines set the trigger and leave the limits to a file-level determination. Policy terms vary by carrier, so the specifics belong with your insurance agent.
August 31, 2026
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A property subject to a pending zoning or land-use change is not eligible under our Small Balance Commercial program. It is a flat ineligibility rather than a pricing adjustment, and it sits in the appraisal section beside the rules requiring the report to state the specific zoning classification, describe the permitted uses, and note the property's compliance status. This page covers why the line is drawn there, what the guideline leaves undefined, and what a buyer under contract can practically do about timing.
August 31, 2026
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A zoning variance is not an automatic decline. Properties with zoning variances are subject to review and must not harm marketability, and the appraisal report has to state and define the specific zoning classification, describe the permitted uses, and note the property compliance status. Legal and legal non-conforming uses are acceptable; illegal uses are not. A property that is subject to a pending zoning change is a different question and is not eligible.
August 31, 2026
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An unpermitted basement apartment or converted garage is excluded from both appraised value and qualifying revenue, so the building underwrites as if it does not exist. That exclusion cascades straight into LTV and DSCR. Here is what the appraiser and the underwriter actually do with unpermitted space, how legal non-conforming status differs, and what an owner can do about it.
August 31, 2026
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