Written & reviewed by Stephen A. Sobin, President of Select Commercial Funding LLC
Industrial
Manufacturing Plant Loans
Select Commercial finances manufacturing and production facilities, purchase and refinance, for both owner-users and investors. Owner-occupied plants can reach up to 90% LTV through SBA programs, while investor-owned facilities are typically financed up to 75% LTV, from $1,500,000.
Get a Free QuoteManufacturing Loan Rates & Terms
Rates updated as of August 23, 2026
| Loan Type | Rate* | Max LTV |
|---|---|---|
| Bank Portfolio | 6.76% | Up to 75% |
| SBA 504 | 6.03% | Up to 90% |
| SBA 7(a) | 6.75% | Up to 90% |
| CMBS / Conduit | 6.66% | Up to 75% |
Rates last updated August 23, 2026. Rates and maximum LTV shown represent our best-case pricing scenarios. Actual rates, LTV, and loan terms are subject to underwriting approval and may vary.
Financing Production and Industrial Facilities
Manufacturing real estate covers a wide range of building types, from light-assembly and flex space to heavy production plants with specialized improvements, cold or clean rooms, heavy power service and reinforced floors. Two questions drive every manufacturing loan: is the building owner-occupied or leased to a tenant, and how general-purpose is it. A modern, general-purpose plant with adequate clear height, column spacing and power can be re-tenanted easily and earns the best terms, while a highly specialized single-purpose facility is underwritten more conservatively because fewer buyers could reuse it.
For an owner-occupied plant, the lender underwrites both the real estate and the operating company that occupies it, looking at business cash flow, the debt-service-coverage ratio and the borrower’s experience and credit. For an investor-owned facility leased to a manufacturing tenant, the loan is sized to the property’s net operating income, the strength and term of the lease, and a minimum debt-service-coverage ratio. We match each facility to the right capital source, bank, SBA, CMBS, life company or private, based on those factors.
Loan Programs for Manufacturing Property
There is no single manufacturing loan. The right structure depends on whether you occupy the plant or lease it out, and on how much leverage and term you need.
- SBA 504 for owner-users: pairs a bank first mortgage with a Certified Development Company second, financing owner-occupied real estate and heavy fixed equipment with as little as 10% down, so up to 90% financing. The real estate portion is amortized over 25 years and equipment over 10 years at a long-term fixed rate with no balloon. Manufacturers qualify for a higher project-level debenture than other industries and are not subject to the standard overall project-size cap, so larger and multiple projects are possible. The business must occupy at least 51% of the building.
- SBA 7(a) for owner-users: a single, more flexible loan that can combine the real estate, equipment, business acquisition and working capital, with up to 90% financing and long amortizations. It suits owners who want one loan to buy or expand a plant and fund the operation at the same time.
- Conventional and bank owner-occupied: for established manufacturers with strong financials, typically up to 75% LTV with fixed terms of 5, 7 or 10 years and 25 year amortizations. Often the fastest route for a well-qualified owner-user.
- Investor and leased-facility financing: for manufacturing property held for rental income, generally up to 75% LTV through bank, CMBS or life-company lenders, underwritten to the property’s net operating income and a minimum debt-service-coverage ratio.
- Bridge and value-add: short-term capital to acquire, reposition or re-tenant a plant, or to close quickly before arranging permanent financing.
Financing for Owner-Users and Small Businesses
Select Commercial specializes in financing small-business owners who occupy their own manufacturing and production facilities. Many owner-users have trouble getting traditional bank financing because of company size, a specialized single-purpose building, credit history, or the difficulty of documenting income through tax returns. Through SBA 504 and 7(a) programs and flexible bank and private lenders, we structure high-leverage financing, up to 90% and in some cases 100%, and for a startup or an expansion we can sometimes use projection-based income to help you qualify.
We actively finance manufacturing plants alongside a wide range of owner-operated, single-purpose businesses, including auto repair, food production, franchises, self-storage, recreational facilities and more. Loans start at $1,500,000, for purchase, refinance, cash-out or expansion nationwide.
What Lenders Evaluate on a Manufacturing Facility
Because a plant is both real estate and, for owner-users, the home of an operating business, underwriting looks at the building, the site and the company together. The physical factors that most affect financeability are:
- General-purpose reusability versus single-purpose design
- Clear ceiling height, column spacing and usable floor area
- Floor load capacity and any reinforced or heavy-equipment areas
- Electrical service, including heavy or three-phase power
- Loading, with dock-high and drive-in access and truck-court depth
- Industrial zoning and legal, conforming use
- Location and access to labor, highways and transportation
- Building age, condition and remaining useful life
Manufacturing sites also carry an environmental profile, so lenders typically require a Phase I Environmental Site Assessment, and further review where a prior use suggests possible contamination. A clean report, a general-purpose building and a solid location together produce the best leverage and pricing.
Purchase, Refinance, Cash-Out and Expansion
We arrange manufacturing financing across the full ownership cycle. Owner-users purchase or construct a plant with high-leverage SBA or bank financing, refinance existing debt to lower the rate or extend the term, or take cash out of accumulated equity for equipment, expansion or working capital. Investors acquire leased production and industrial facilities, refinance maturing loans, and recapitalize through bank, CMBS and life-company lenders. Where a plant needs to be expanded or modernized, financing can fund the building, the fixed equipment and the improvements together.
The 2026 Manufacturing Real Estate Market
Domestic manufacturing investment remains at a historically high level in 2026, even after cooling from its recent peak. Annual manufacturing construction spending approached a record near $250 billion in 2024 and has since eased into the mid-$170 billion range, still more than double where it stood only a few years earlier. That build-out has concentrated in semiconductor, battery and clean-energy, and chemical facilities, alongside a meaningful share of foreign investment flowing into United States production. The result is steady demand for owner-occupied plants and build-to-suit facilities designed around a specific process.
The broader industrial market, by contrast, has softened. Vacancy has climbed into the mid-7% range as a wave of warehouse and distribution space delivered into slower tenant demand, and rent growth has moderated to the low single digits. Speculative development of generic space has pulled back sharply, while purpose-built manufacturing projects continue, because a specialized plant cannot simply be leased off the shelf. For a manufacturer, softer conditions in the general industrial market can mean better acquisition pricing and more room to negotiate on the right building.
The practical takeaway for 2026 is that this is a market that rewards owning the right facility rather than leasing it. Ownership locks in occupancy of a plant built around your operation, fixes the largest piece of overhead with a long-term amortizing loan, and builds equity instead of paying rent. High-leverage SBA and bank owner-occupied programs make that purchase achievable with a modest down payment, and we structure the financing to fit each company’s process, growth plan and balance sheet.
2026 SBA Update for Manufacturers
Two dated changes make 2026 the strongest SBA environment manufacturers have seen:
- Loan caps doubled. Effective July 4, 2026, the combined SBA 7(a) plus 504 limit rose from $5 million to $10 million (announced May 18, 2026). Small manufacturers can pair up to $5 million of 7(a) with 504 project financing for distinct projects, covering real estate, heavy equipment and working capital in one plan.
- Record volume. SBA lending hit an all-time high in FY2025 at $44.8 billion across 84,400 loans, including 3,500+ loans for $2.6 billion to small manufacturers (SBA, September 2025), so lender appetite for qualified manufacturing deals is strong.
We finance manufacturing property nationwide, including the leading reshoring states: Texas, Ohio, Arizona, Indiana and South Carolina, and in manufacturing metros such as Houston, Detroit, Cleveland, Columbus, Fort Worth, Grand Rapids, Milwaukee and Phoenix.
Financing Options in Commercial
Commercial apartment, multifamily and commercial properties each have dedicated financing. Pick the page that matches your property:
Financing in another state? Explore our apartment loans, multifamily loans and commercial mortgages nationwide.
What Our Clients Say
“As a real estate attorney, I trust that Select Commercial will deliver commercial mortgages in a timely manner. My clients are always handled professionally, and the rates and terms are excellent. I heartily recommend them.”
David S. · New York City“I needed an SBA loan and found Select Commercial. It was obvious Stephen knew everything about commercial loans. If you are starting a small business, definitely give them a call.”
Larry S. · Washington, DC“Select Commercial was very helpful with my commercial mortgage. I needed to increase cash flow due to maintenance on my property. Stephen went over several options and got me the funds while lowering my payments.”
Gary M. · Portland, OR“Select Commercial offered 100% financing for my medical practice when my bank would have required 20% down. They delivered something my bank could not, and handled everything professionally.”
John C. · Boston, MAGet a Free Quote
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