SBA vs Hard Money — The Texas Investor’s Comparison
These two programs serve completely different purposes. Here’s how to know which one fits your deal.
| Feature | SBA 7(a) / 504 | Hard Money |
|---|---|---|
| Close time | 45–90 days | 7–14 days |
| Rate | 6.5%–8% | 10%–13% |
| Credit score | 650+ | None required |
| Documents | Full doc (tax returns, P&L) | Minimal (asset-based) |
| Property condition | Must be habitable | Distressed OK |
| Down payment | 10% (SBA 504) | 25–35% |
| Best for | Owner-occupied, stable business | Fix-and-flip, time-sensitive deals |
Use SBA When…
You’re buying owner-occupied commercial real estate, you have 2 years of business tax returns, your credit is 650+, and you can wait 45–90 days to close. SBA 504 gets you a below-market fixed rate with only 10% down.
Use Hard Money When…
You need to close in under 30 days, the property is distressed or vacant, your credit is below 650, you’re an investor (not owner-occupant), or the deal won’t qualify for conventional financing.
Can You Use Both?
Yes — a common Texas strategy: close with hard money (fast), stabilize the property, then refinance into an SBA or DSCR loan at a lower rate. This is called a bridge-to-perm strategy.
Tell us about your deal — we’ll tell you which program fits.