The balloon is coming due. Here are the options — with honest math on each one.
SBA 7(a) loans for commercial real estate typically run 10 to 25 years. Operators who financed their first or second location through the SBA program in 2010, 2012, or 2015 are approaching maturity on those loans — or will be in the next few years.
At maturity, the loan comes due in full. Unlike a residential mortgage that simply ends with the final amortization payment, a commercial loan at maturity requires either repayment of the remaining balance (if there is one) or refinancing into a new structure. If you haven't thought about this yet, the time to start is 12-18 months before the maturity date.
Here are the options, and what each one actually looks like.
Option 1: Conventional refinance
The most straightforward option. You replace the maturing SBA loan with a new conventional commercial real estate loan — typically from a bank, credit union, or CMBS lender — at current market terms.
What you need to qualify: Strong business cash flow, sufficient property value to support the new loan at 65-75% LTV, and business financials that can sustain the new debt service. If the property has appreciated since your original SBA loan, a conventional refinance at 70% LTV may produce enough proceeds to pay off the SBA balance and generate modest additional capital.
Current market terms (Q2 2026): Commercial real estate loans on owner-occupied properties are pricing at 6.5-8.5% depending on the lender, property type, and borrower profile. Fixed periods vary — 5-year fixed with 20-year amortization is common. You're replacing certainty (a fully amortized loan nearing payoff) with new variable-rate risk over the next fixed period.
When conventional refinance makes sense: Your SBA balance is manageable relative to property value. You want to maintain real estate ownership as a long-term strategy. Your business cash flow can comfortably service the new debt at current rates without covenant friction.
The honest constraint: If you have multiple SBA loans approaching maturity simultaneously, or if the conventional market's 65-75% LTV doesn't produce enough proceeds to pay off the existing balance (e.g., the property hasn't appreciated sufficiently), conventional refinance may require an equity contribution from you at closing.
Option 2: SBA refinancing into a new SBA loan
The SBA 7(a) program allows refinancing of existing SBA debt in certain circumstances. The 504 program (for real estate and major equipment) also has a refinancing option.
What changes: You extend the maturity — potentially another 10-25 years — at new market terms. The SBA's current rate environment applies. Personal guarantees reset.
When SBA refinancing makes sense: You have one or two SBA loans, you're below the $5M aggregate ceiling, and the business wants to continue with the familiar SBA structure. The personal guarantee requirement remains, and you're adding more years to your PG exposure, but the program is familiar and the process is known.
When SBA refinancing doesn't make sense: You're already at or near the $5M aggregate ceiling. An SBA refinance of the maturing loan may push you above the ceiling if you count the new loan — creating a compliance issue. Check your aggregate exposure before pursuing SBA refinancing.
Option 3: Sale-leaseback — convert the equity to operating capital
If the maturing loan is on a property with significant equity — either because the original LTV was modest or because the property has appreciated — a sale-leaseback at maturity converts that equity into operating capital while simultaneously eliminating the refinancing decision.
The math: An operator with a property worth $4.2M and a remaining SBA balance of $900,000 has $3.3M in equity. A conventional refinance at 70% LTV produces $2.94M — enough to pay off the SBA balance ($900K) with $2.04M remaining. A sale-leaseback at market value produces $4.2M — pay off the $900K balance and deploy $3.3M.
The gap is $1.26M. On this property, that's the difference between a conventional refinance and a sale-leaseback.
What you give up: Ownership of the property. Going forward, you pay NNN rent rather than a mortgage payment. The rent is typically comparable to the new debt service — but unlike debt service, it doesn't amortize down over time, and it continues for the 20-year lease term regardless of whether you'd have paid off the mortgage in year 18.
When SLB at maturity makes particularly good sense:
- When the property has appreciated significantly and the equity is large
- When the conventional refinance requires a personal guarantee reset you want to avoid
- When the business has growth plans that need more capital than a conventional refinance produces
- When covenant restrictions from a new loan would limit the business's operational flexibility
When SLB at maturity doesn't make sense:
- When the property's appreciation potential is the most valuable thing about it (certain land positions)
- When the business's EBITDA doesn't produce adequate rent coverage at market cap rates
- When the operator intends to exit the business within the next 3-5 years and doesn't want a 20-year lease obligation
Option 4: Sell the property and lease space
Distinct from a sale-leaseback: sell the property on the open market (not structured as an SLB) and transition to a conventional lease with a third-party landlord. This option is most relevant when the operator doesn't want to remain in the specific location long-term.
The difference from an SLB: a conventional sale to a third-party buyer produces market-rate proceeds, but the resulting lease is negotiated at arm's length with a buyer whose primary interest is real estate investment return, not a long-term tenant relationship. Lease terms, renewal options, and assignment flexibility may be less favorable than an SLB structured with a capital partner who wants the relationship.
The decision timeline
Maturity decisions shouldn't happen in the 90 days before the loan comes due. The conventional refinance process takes 60-120 days. An SBA refinancing takes similar time. A sale-leaseback typically closes in 30-60 days — but the decision to pursue one, the property preparation, and the financial documentation take additional time.
Start the conversation 12-18 months before maturity. If you're 24 months out and don't know which option fits your situation, that's the right moment to have exploratory conversations with lenders and with a sale-leaseback capital partner.
The cost of getting this wrong is high — a borrower who arrives at maturity without a plan is a borrower who makes decisions under pressure, which is the worst time to make them.
SBA maturity coming up in the next two years? We work with operators at this exact inflection point. Understanding what the SLB option looks like against your specific numbers takes one conversation. We can have that conversation before you're in the middle of a conventional refinancing process.