Special Purpose Properties
SBA requires 15% equity injection into any project property that is considered special purpose. If the loan is the owner’s second SBA loan (7a or 504) for a special purpose property then SBA requires a 20% equity injection into the project. The SBA SOPs define special purpose as “a limited-market property with a unique physical design, special construction materials, or a layout that restricts its utility to the specific use for which it was built.” SBA does provide a list of properties it automatically considers special purpose, below. This list is not all inclusive but a great starting point for making the identification if a property is special purpose. Other triggers could be comments made by the appraiser in the appraisal report.
Special Purpose Properties Include:
- Amusement parks
- Car wash businesses
- Cold storage facilities - more than 50% of total sq ft is equipped for refrigeration
- Bowling alleys
- Cemeteries
- Quarries, including gravel pits
- Golf courses
- Farms
- Railroads
- Sports arenas
- Livestock & Dairy facilities
- Sanitary landfills
- Swimming Pools
- Gas stations
- Service centers w/ pits and in ground lifts (oil and lube, brake or transmission center)
- Tennis clubs
- Hotels, motels, & lodging facilities
- Hospitals, surgery centers, urgent care centers, other health / medical facilities
- Theaters
- Nursing homes, assisted living facilities
- Dormitories
- Wineries
- Mines, Oil wells
- Marinas
If you have any questions on whether your borrower’s property is special purpose give one of our loan officers a call and they can assist you in making the determination or completing a prescreen with SBA.
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