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If you're thinking about buying a business, don’t overlook the massive long-term benefits of choosing one that comes with real estate. According to Beau Eckstein, a business ownership and financing expert with over 20 years in the lending industry, combining a business purchase with real estate can give you greater cash flow, better loan terms, and long-term wealth.
Whether you're investing $2.2 million in property and $1.2 million in a business—or looking at a smaller deal—the strategy can work in your favor. Here's why.
🏢 Business + Real Estate = Smarter SBA Financing
Let’s break it down. In Beau’s example, the deal totals $3.4 million:
- $2.2M in real estate
- $1.2M in the business itself
Here’s the big advantage:
When the real estate makes up at least 51% of the total purchase, the entire SBA loan can be amortized over 25 years, instead of the usual 10.
“That longer amortization can significantly reduce your monthly payments,” Beau explains, “making the business more cash-flow positive from day one.”
This is one of the best-kept secrets in SBA financing—and it's a huge win for investors looking to build both income and equity.
💡 7(a) vs. 504 Loans: Which is Better for This Strategy?
Beau shares that SBA 7(a) loans are often the better choice in today’s environment. Why?
- 7(a) loans allow for one loan that includes both the real estate and the business.
- They offer flexible fixed-rate options.
- The prepayment penalty is only three years and declining—great if you want the option to refinance or sell early.
- Banks love these loans because they can sell them off right away, making approval easier.
Alternatively, you could split the deal:
- Use a 504 loan for the real estate
- Use a 7(a) for the business portion
This can make sense in some cases, but a single 7(a) loan often simplifies things and gives you better terms if structured correctly.
✍️ Pro Tip: How You Structure the Purchase Agreement Matters
One of Beau’s key strategies?
“Always try to allocate more value to the real estate in your purchase agreement—if it’s justifiable. That way, you qualify for the longer 25-year amortization.”
Example:
- A $3M business and $300K real estate would only qualify for 10-year amortization.
- But flip the weighting if it’s accurate—more real estate, longer term, better cash flow.
Banks won’t accept weird amortization terms (like 16 or 17 years), so they’ll often break the loan into two separate notes to match SBA standards.
👨👩👦 Build a Legacy, Not Just a Business
Beau isn’t just talking theory—he’s building a legacy for his own family, including Baby Bo, his newborn son.
“If you want to create legacy for your family,” Beau says, “this is one of the smartest ways to do it—buy a business, own the real estate, and let appreciation work for you.”
Real estate can act as a retirement plan, a generational asset, and a hedge against inflation, all while your business provides day-to-day income.