Owner-Occupied Commercial Real Estate Financing On Your Terms

March 6, 2025

Is your company renting an older, outdated commercial facility or dealing with strict landlord regulations at your location? If these issues are a struggle for your local business, it may be time to stop leasing and consider commercial property ownership instead.

Securing owner-occupied commercial real estate financing could be the right move to establish a better, permanent base for your operations with fewer obstacles to growing your business.

Learn more about rent replacement options if you are considering owning your own property, how Texas Gulf Bank assists business owners with commercial real estate loans, and how you may enjoy greater financial stability through property ownership.

Understanding Owner-Occupied Commercial Real Estate Financing

Owner-occupied real estate (OORE) loans are types of commercial loans where a business occupies at least 51% of the space. Examples of owner-occupied real estate include commercial properties such as office buildings, hotels, retail spaces, and healthcare facilities.

To qualify for owner-occupied commercial real estate loans, your business must occupy the majority of the property for business operations. Any remaining space can be leased out to other businesses or entities, which may allow you to generate rental income and improve your company’s cash flow.

Benefits of Property Ownership vs. Renting

Making the transition from renting commercial space to owning a commercial property offers many significant benefits. The advantages of replacing rental agreements with owning property include the following:

Building Equity: Each monthly payment contributes to building equity in the property, which may create long-term financial benefits to property owners.
Predictable Monthly Payments: If approved for an OORE loan, your business may enjoy consistent monthly payments and avoid sudden price fluctuations from property owners that may occur when renting commercial space.
Additional Revenue Streams: Renting out unused commercial space allows you the opportunity to generate additional revenue for your business, which has the potential to strengthen your cash flow.
Tax* Deductions: Ownership could provide tax advantages for your business, such as deductions on mortgage interest and property taxes.
Control Over the Property: Owning commercial property gives your business freedom to make modifications and improvements as needed without landlord restrictions.

*Consult your tax advisor for how property ownership might benefit you depending on your particular tax situation

Ultimately, pursuing an owner-occupied commercial real estate loan may position your local business for long-term success and financial stability. Texas Gulf Bank lenders can help determine whether this type of loan benefits you.

Texas Gulf Bank Offers Financing Options That Support Growth

Texas Gulf Bank offers financing options for owner-occupied commercial real estate loans, including conventional owner-occupied loans and Small Business Administration (SBA) lending programs like the SBA 504 loan.

Our lenders can work with you to identify the best type of loan option for your commercial property needs and guide you through the entire loan process.

Conventional Loans

Conventional OORE loans with Texas Gulf Bank are an excellent choice for business owners who need financing for commercial property acquisition and want to enjoy a streamlined, efficient loan process with a local bank.

We offer competitive rates, favorable loan terms, and lending flexibility to ensure your loan meets your specific needs. Plus, our lenders are local to the Southeast Texas Gulf Coast region, enabling you to receive timely support for your lending needs.

SBA 504 Loan

The Small Business Administration (SBA) is a federal agency dedicated to encouraging growth by providing a loan guarantee on a portion of the loan amount to eligible small business owners. This helps allow a larger number of businesses to secure the funding necessary for growth.

An SBA 504 loan provides qualifying small businesses with access to long-term, fixed-rate financing for major assets such as commercial real estate.

This program is designed to make property ownership more accessible to small businesses that need additional capital resources for rent replacement. We have a dedicated SBA lender who can review this option with you to determine if it’s the right fit for your business.

The Loan Application Process with Texas Gulf Bank

Pursuing owner-occupied commercial real estate financing through Texas Gulf Bank is a straightforward process. From the initial consultation to final approval, Texas Gulf Bank provides business owners the information they need to determine if an OORE loan is the right fit for their needs.

The first step in the owner-occupied loan process is meeting with a Texas Gulf Bank lender to discuss your financing needs and business goals. During this conversation, one of our lenders will evaluate your business history and financial health, plans for the potential site, and your company’s ability to repay the loan.

As part of the loan application process, you will need to provide the following documents for the application:

A budget for the project.
Three most current filed years of tax returns and financial statements for the company.
Personal tax returns from the past three years.
Most recent year to date balance sheet and income statement
Plat/survey
Plans including building elevations
Personal financial statement for business owners and any guarantors
Detailed business plan
Land and building details, including purchase price, and environmental reports
Existing debt schedules

Once we receive all required documentation, our in-house lending team will review your application to determine your loan eligibility. We will also craft a financing package that fits your business. If approved, you may receive funding promptly so you can complete the property purchase and begin the next phase of your business growth.

Choosing Texas Gulf Bank as your lending partner may help ensure the successful purchase of the commercial property you have in mind. We are confident that working with a relationship-based bank will help put you on the path to achieve long-term business growth.

Get Started Today

If you’re ready to stop renting commercial property and want to secure owner-occupied commercial real estate financing, Texas Gulf Bank is here to help.

Contact a lender today to discuss your options and take the first step toward building equity in a valuable business asset.

All loans subject to credit approval