3 things worth knowing before your next deal
A rule change that shortens some 25-year terms, the kind of loan that passes the SBA's refinance test automatically, and a land surveyor who closed $1.37M after three problems nearly stalled it.
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Nick Repertorio
Nationwide Direct Lender
Navy Veteran · Retired NJ State Trooper
Buying a Business and Its Building? The 25-Year Term Just Got Shorter.
Under the SBA's new rulebook, SOP 50 10 8.1, the 25-year term on a business purchase now covers only the building.
Everything else in the loan, like goodwill, equipment and working capital, gets 10 years. Your lender can either split it into two loans, or blend it into one term based on how the money is used.
And what that means is...
A $1.4 million deal that's $1 million building and $400,000 business blends to about 21 years, not 25. Four fewer years means a bigger monthly payment. How much bigger depends on your rate, your down payment and how the deal is split. That's the number worth running before you sign.
Before October 1, a deal like that could run up to 25 years across the board, as long as 51% or more of the loan went to real estate. That option is gone when the loan buys a business.
There is one exception. If the building is a special-purpose property, the business operates from it, the building can't be separated from the business, and real estate makes up 85% or more of the project, the whole loan can still go up to 25 years.
Blended term estimator
Please enter an amount
Estimated blended term: 21 years
If the building is a special-purpose property the business operates from, the term may go up to 25 years. Ask Nick.
This is a rough estimate, not a loan decision. Your actual structure depends on the full deal, the appraisal and underwriting.
Your Balloon Payment Is Coming. Is Your Bank Going to Renew?
A lot of commercial mortgages are coming due right now. The Mortgage Bankers Association counts $875 billion in commercial and multifamily mortgages scheduled to mature in 2026 alone, and $396 billion of that is held by banks and other depositories. Source: MBA, Feb 9, 2026
Many conventional commercial mortgages carry 5- to 10-year terms with a balloon at the end. If your bank isn't offering renewal terms you can live with, an SBA 7(a) refinance can replace it with a term of up to 25 years, fully amortizing, no balloon.
Here's the part most owners don't know. The SBA won't refinance a loan just for the sake of it. In most cases the new payment has to be at least 10% lower than the old one. But a loan with a balloon coming due passes that test automatically. One catch: it has to be current. Let the balloon date pass unpaid for more than 29 days and the SBA can't refinance it.
Timing matters. An SBA refinance typically takes 45 to 90 days from a complete application to closing. If your balloon is six months out and you haven't started, you're behind. Start at least 12 months before it comes due.
You'd Think a Deal for a Land Surveyor Would Come With Clear Boundaries.
$1.37M
A Connecticut land surveyor who has run his own firm since 2016 just bought a nearby surveying firm, its archive of maps and field notes going back nearly a century, and the office condo it works out of.
The archive is the prize. When a property in one of those old subdivisions changes hands, the survey work tends to come back to the firm that mapped it.
Three things came up.
- The building joined the deal. It started as a business purchase with a short lease on the office. Midway through, he and the seller agreed he would buy the condo too. We rebuilt the loan around both, with a new company to hold the real estate, and the whole loan moved to a 25-year term.
- A 2019 oil spill. The environmental screen found a petroleum release in the building's basement sump and recommended a Phase I report, about three more weeks. I pulled the state's own records: roughly 2,400 gallons of oily water pumped out, no oil on re-inspection, case closed. We sent them to the environmental firm and left the call to their professional. That afternoon, the concern came off and the report went to low risk. It saved him about three weeks and a couple thousand dollars.
- The condo association's insurance. We needed a certificate on the association's master policy. Three written requests to the agent went unanswered. Then an account executive at the agency picked it up, we sent the exact wording that evening, and the certificate came in the next morning.
Closed and funded: SBA 7(a), 25-year term, fully amortizing, no balloon.
Under the rule in this week's Pulse, it's probably my last deal like this.
Anybody can close a loan when every line is already drawn. It takes a team that keeps digging when one isn't.
Let me run your real numbers.
The rulebook is on this page. Your deal is the math.
For Borrowers
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Nick RepertorioSBA Commercial LenderOwner-Occupied Commercial Real Estate