When a single SBA 7(a) loan covers more than one purpose — say, buying a building and funding working capital — the loan needs one maturity date. How do lenders set it? Through blended maturity.
The basic rule
Each use of proceeds has its own maximum term: 25 years for real estate, 10 years for working capital and most other purposes. For a mixed-use loan, the lender blends them proportionally — a weighted average based on how the money is used.
Example
A $1M loan: $600K for a building, $400K for working capital.
Blended term = ($600K × 25 yrs + $400K × 10 yrs) ÷ $1M ≈ 19 years
The 51% shortcut
There is an important exception: if 51% or more of the loan proceeds go toward real estate, the lender may set the full 25-year term on the entire loan — no blending math required. Note this is about the share of loan dollars, not the SBA's separate 51% owner-occupancy rule (which concerns how much of the building your business occupies).
Why it matters
- Longer term = lower payment = better DSCR. Structuring just over 51% toward real estate can meaningfully reduce the monthly payment.
- Plan the mix early. Shifting the use-of-proceeds split during underwriting causes delays.
Blended maturity is one of several structuring levers that can make or break an application's cash-flow math. It's worth discussing before the loan is submitted, not after.