Quick answer: SBA 7(a) loans, conventional bank loans, and equipment financing are the main ways to finance a commercial build-out in Los Angeles — SBA 7(a) specifically applies to improvements on space you lease rather than own. APLA Construction (CA Lic #1136359) handles this throughout Greater Los Angeles.
Financing a commercial build-out is different from financing a home renovation — most banks won’t lend against improvements to a space you don’t own, and a landlord’s tenant improvement allowance rarely covers the full scope. APLA Construction (CA Lic #1136359) works with small business owners across Greater Los Angeles who are financing everything from a $60,000 retail build-out to a $500,000+ restaurant or medical office project, and this guide covers the financing paths that actually apply to leasehold improvements.
Before looking at loans, know what your lease already covers. Most commercial leases in LA include a landlord-funded tenant improvement allowance — see our commercial tenant improvement guide for how TI allowances typically work. Financing usually covers the gap between that allowance and your total build-out cost, not the whole project.
The SBA 7(a) program is the most flexible SBA loan type and is commonly used to finance leasehold improvements, equipment, and working capital for a build-out — unlike SBA 504, it doesn’t require you to own the real estate:
If you’re purchasing and improving a building you’ll occupy (rather than building out a leased space), SBA 504 financing is built for exactly that: fixed-rate, long-term financing for real estate and major equipment, typically requiring the business to occupy at least 51% of the property. It doesn’t apply to standard leased-space tenant improvements — for that scope, 7(a) or a conventional loan is the more common fit.
Banks and credit unions with a commercial lending arm will finance build-outs directly, usually with:
For restaurant kitchen equipment, medical/dental equipment, or specialized machinery, equipment financing (or an equipment lease) is often faster and easier to qualify for than a full construction loan, since the equipment itself secures the loan. This is commonly used alongside a separate construction loan or TI allowance for the build-out itself — see our restaurant build-out guide and medical/dental build-out guide for what that equipment typically costs.
Having a firm, written estimate from your contractor before you approach a lender speeds up approval significantly — vague budgets are one of the most common reasons financing applications stall.
Yes — SBA 7(a) loans are commonly used for leasehold improvements in a leased commercial space; SBA 504 is the program that requires you to own and occupy the real estate.
It varies by lender and loan type, but expect to contribute roughly 10–20% of the project cost yourself, with your landlord’s TI allowance (if any) counted separately.
Yes — a detailed, itemized written estimate is one of the first documents most lenders request, and having it ready before you apply significantly speeds up the process.
Yes, this is common — many restaurant and medical/dental build-outs use a separate equipment loan or lease for kitchen or clinical equipment alongside financing (or a TI allowance) for the construction itself.
We provide the detailed written estimates lenders require and can speak directly with your lender about project scope and timeline, though the financing itself is arranged through your bank, credit union, or SBA lender.
APLA Construction provides detailed written estimates for commercial build-outs across Greater Los Angeles — the documentation you need whether you’re using a TI allowance, a loan, or both.
Call (818) 818-4419 or email info@aplaconstruction.com for a written estimate. CA General Contractor License #1136359 — verify on CSLB.