I've put an offer on a small commercial property, which has been accepted and is currently in the due diligence period, of which I have until mid October. My objective is to move my current business into the property and become my own landlord. The broker connected me with bankers (a large national bank) who he works with regularly, which I appreciated since I have no experience buying a building.

Had discussions with them, discussed SBA 5, 7A and conventional. Since the property is under 1 mill on purchase price they said SBA 7A sounds like the best option, it waives loan fees due to the amount of the loan under 1 mill, loan would only have a 3 year prepayment penalty, I would just need to put 15% down etc. So fine, apply, provide all the tax info, investment info, etc, and they have now come back and said I am approved.....but not through SBA. They said SBA deems me "too strong" of a borrower and my financials too good that SBA???

They said they got me approved for conventional at 6% on a 20-year fixed term, with 20% down, and those terms actually sound good compared to what another large bank told me. I'm in a solid position financially, but I'm not rich, so their saying yesterday that my financials are too good for SBA seems odd to me. Sorry for the long backstory - but is that a thing with SBA? My understanding was SBA 7A does all sorts of loans for huge amounts for people with a lot more money than me. Should I be distrustful?

Appreciate any insights.