How to Get a Commercial Real Estate Loan in Texas: SBA 504 and Government Programs

Purchasing or leasing commercial real estate is often the largest financial commitment a Texas business makes. Government-backed programs can reduce down payment requirements, provide below-market interest rates, and offer tax abatements that significantly lower occupancy costs.

SBA 504 Loan for Real Estate

The SBA 504 program is the primary government-backed option for commercial real estate purchases. The program uses a three-party structure:

• A conventional lender provides 50 percent of the financing
• A Certified Development Company (CDC) provides up to 40 percent with SBA backing
• The borrower contributes as little as 10 percent as a down payment
• Terms extend up to 25 years with fixed rates on the SBA portion

SBA 504 guide.

Property Tax Abatements

Many Texas cities and counties offer property tax abatements for businesses that invest in real property and create jobs. Abatements can reduce property tax liability by up to 100 percent for up to 10 years. Property tax abatement guide.

Chapter 380 Agreements

Texas municipalities can offer economic development agreements under Chapter 380 of the Local Government Code. These agreements can include property tax refunds, sales tax sharing, fee waivers, and other incentives tied to job creation and capital investment. Chapter 380 guide.

USDA Rural Real Estate

Businesses in rural Texas may qualify for USDA Business & Industry loan guarantees that can be used for real estate purchases. These programs serve communities with populations under 50,000. USDA rural business guide.

Application Steps

1. Identify the property and determine total project costs
2. Check whether local tax abatements or Chapter 380 agreements are available
3. Contact SBA-approved CDCs for 504 loan options
4. Prepare business financials, tax returns, and a business plan
5. Compare total cost of ownership including taxes, insurance, and maintenance

Find All Real Estate Programs

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