Can an SBA loan finance a coworking space?

“Shopping centers, office suites (aka salon suites), ghost kitchens, and similar business models that generate income by renting space to accommodate independent businesses that provide services directly to the public are not eligible unless all of the following apply: The revenue is earned through membership dues (not rent); and The business’s customers do not have an assigned space that they know they can return to each time they visit (i.e., customers do not get an office with a lockable door or a particular kitchen setup and the space cannot be personalized); and The business is responsible for upkeep and maintenance and is supplying the equipment necessary for a fully functioning office/kitchen where customers can drop in and begin working. It is acceptable for customers to bring their own tools with them (e.g., kitchen knives). A business is either fully eligible or fully ineligible. If a business has a combined model (part of the revenue is from rent and part from membership dues or they provide for options where there is an assigned space model), it is not eligible.

“An ineligible business cannot obtain an SBA Loan for any purpose, including the purchase or construction of a building for its own use.

“When loan proceeds are used to purchase or improve real estate, or when debt secured by real estate is refinanced with loan proceeds: For an existing building, the Applicant must occupy 51% of the Rentable Property and may lease to a third party up to 49%; or For new construction, the Applicant must occupy 60% of the Rentable Property, may permanently lease to a third party up to 20% and temporarily lease an additional 20% with the intention of using some of the additional 20% within 3 years and all of it within 10 years.

““Rentable Property” is the total square footage of all buildings or facilities used for business operations (13 CFR § 120.10) excluding stairways, elevators, and mechanical areas and including common areas.