Updated November 13, 2026
Quick answer
As of November 2026, an SBA 7(a) loan can finance land your business actively uses, such as a contractor's storage yard with a shop, over up to 25 years, and some lenders go to 100% for established companies. Land bought for the future, to resell or to lease out is excess land and can't be financed with SBA proceeds. Axiant Partners, a broker in Boca Raton, finds lenders for yard purchases. Terms are typical, not a quote.
Used Land Versus Excess Land
SOP 50 10 8.1 bars SBA proceeds from property held for future development, sale, lease or investment, and from excess land: land not in immediate use as part of the project. So the test isn't whether it's land, it's whether your business uses it now. This is the land side of 100% SBA financing.
| Usually financeable | Usually not |
|---|---|
| Fenced storage yard | Acreage held for a future building |
| Shop, office and wash bay | Lots you plan to sell or lease |
| Daily truck parking, staging | Raw land with no business use yet |
| Land under a new building | Speculative homes or spec buildings |
Farming has its own rule: farm land beyond the operation's needs is excess, and the SOP specifically bars buying vacant or row-crop land for future use or to lease.
Why the Yard Counts Toward Occupancy
Your business must occupy at least 51% of an existing property's rentable space. The SOP lets exterior space count when it is actively used in the business, and names outdoor storage yards for general contractors, trucking companies and moving and storage companies as examples. Parking areas don't count.
Example: a 4,000 sq ft shop and a 30,000 sq ft storage yard you use, plus a 6,000 sq ft building you lease to a tenant. You occupy 34,000 of 40,000 square feet, or 85%. Counting buildings alone, you'd be at 40% and fail. See the 51% occupancy rule for the full measuring rules.
Worked Example: A Two-Acre Yard With a Shop
Illustrative numbers, not a quote or an offer; rates and fees change, and every loan is subject to approval. A paving contractor with nine years of history buys a $900,000 property: a shop, a fenced yard and a back acre it has no use for. The appraiser values that acre at $120,000, so the SBA loan covers the rest and the buyer pays for the acre another way. Fees are from the FY2027 7(a) schedule, financed.
| Item | Amount |
|---|---|
| Purchase price | $900,000 |
| Excess acre, not SBA-funded | -$120,000 |
| Reports, survey, title (est.) | $14,500 |
| 7(a) packaging fee (estimate) | $2,500 |
| SBA guaranty fee (computed) | About $21,485 |
| SBA 7(a) loan | About $818,485 |
| Assumed rate and term | 7.75%, 25 years |
| Monthly principal and interest | About $6,182 |
The extra acre can be bought with cash or a separate non-SBA loan, or left out of the deal. Lenders differ on how they treat a small unused strip, so raise it early.
Environmental Checks on a Yard
Heavy and civil engineering construction (NAICS 237) is on the SBA's environmentally sensitive list, so those buyers start with a Phase I. So do trucking companies with service bays, truck washing or fuel tanks. Any site where fuel is dispensed needs a Phase I. A yard with past fueling, equipment repair or buried tanks gets close review whatever your trade. Other buyers over $250,000 start with a questionnaire and records search, which can lead to a Phase I.
Building on the Land
If you'll build a shop, SBA rules add a period for construction to the 25-year term. Above $350,000 of construction, the lender generally needs a licensed contractor with full performance and payment bonds, unless a construction manager controls the funds. When building new, you must occupy 60% of the rentable space.
Need the equipment as well? See contractor financing or landscaping business financing.
Talk to an SBA specialist: (561) 268-0465, or get matched with lenders who offer this structure.
Frequently Asked Questions
Can I use an SBA loan to buy land for my business?
Yes, if your business will use the land now, for example as a storage yard or for a building you'll construct. Land held for future use, resale or lease is not eligible.
What is excess land in an SBA loan?
Land that isn't in immediate use as part of the project. SBA proceeds can't pay for it, so it's carved out of the loan and paid another way, or left out of the purchase.
Does an outdoor storage yard count toward the 51% occupancy rule?
Yes, if it's actively used. The SOP names storage yards for contractors, trucking and moving companies. Parking areas don't count.
Can I buy farm land with an SBA loan?
Only land the farming operation needs. Excess farm land, and vacant or row-crop land for future use or to lease, can't be financed.
Can I get 100% financing on a yard?
Some 7(a) lenders go to 100% for established companies with the cash flow to cover the payment. Many ask for 10% or more, especially on land-heavy deals.
Sources & Further Reading
- SBA SOP 50 10 8.1 (effective October 1, 2026) — The SBA's rules for 7(a) and 504 loans, including equity injection, Appendix 15 on changes of ownership, and eligibility.
- 13 CFR 120.131: Leasing part of new or existing property — The 51% occupancy rule for existing buildings and 60% for new construction.
- NAGGL: FY 2027 7(a) and 504 fee notices — Summary of SBA Information Notice 5000-881797, the 7(a) upfront guaranty fees effective October 1, 2026.
- SBA 7(a) Loans — Program overview and the $5 million maximum loan amount.
Figures above describe ranges commonly seen across lenders and reflect published guidance as of the date on this page. Confirm current terms with the cited source or your lender before acting.