SBA 504: How Texas Business Owners Buy Their Building With 10% Down

Most business owners assume buying their building requires 25 to 30 percent down and a balance sheet twice its size. For owner-occupied commercial real estate, that assumption is usually wrong — and the SBA 504 program is the reason.

How the 504 Structure Works

A typical 504 deal splits the purchase three ways: a conventional bank loan covers roughly 50 percent, an SBA-backed CDC (Certified Development Company) debenture covers about 40 percent at a long-term fixed rate, and you bring approximately 10 percent down. The requirements that matter most: your business must occupy the majority of the building (51 percent for existing buildings), and the deal must pencil against your business’s cash flow. Startups and special-purpose properties can see higher equity requirements — but for an established business buying a standard office, industrial, retail, or medical building, 10 percent down is the working assumption.

The Math That Changes Minds

Run the comparison honestly: your current rent, versus the all-in ownership payment (loan service, taxes, insurance, maintenance) on a comparable building at 90 percent financing. In many Texas submarkets right now, those numbers land close — and sometimes ownership wins outright — with three differences that compound over a decade. Your payment amortizes into equity instead of disappearing. Your occupancy cost is fixed against a future of rent escalations. And you’ve added an appreciating Texas asset to your balance sheet that can outlast the business itself — the sale-leaseback exit, where your building funds your retirement or your next venture, is one of the most common wealth events we broker.

Why 2026 Is a Buyer’s Moment in Several Segments

Elevated vacancy in Austin office and industrial product means more sellers are entertaining owner-user offers than at any point in years, and small-bay industrial, suburban office, and medical condos remain the most active owner/user categories statewide. Meanwhile the buyer pool for these assets skews toward users rather than investors, which keeps competition rational for prepared buyers. “Prepared” is the key word: SBA timelines run longer than conventional closings, so pre-qualification before the search — not after the offer — is what makes owner-user buyers competitive.

When Buying Is the Wrong Answer

Credibility requires saying it: if your footprint is uncertain, a relocation is plausible within five years, or your capital earns more inside your operations than in real estate equity, keep leasing. Our owner/user practice starts every engagement with that lease-versus-own analysis, and we show you the math in both directions before anyone tours a building.

If you’ve been renting the same type of space for years and expect to need it for years more, you owe yourself thirty minutes with the numbers. Request the lease-vs-own analysis — it’s free, and it’s honest. Related reading: medical practices are among the strongest 504 candidates in Texas.