The SBA 504 program, as the OCC and SBA rules describe it, is permanent financing for fixed assets a small business uses, most often the building it occupies. A standard project is often a third-party lender first lien of about half the cost, a Certified Development Company second lien of up to 40 percent backed by an SBA-guaranteed debenture, and borrower equity of at least 10 percent. Equity is higher when the business is new or the building is special-purpose. Those are program rules, not a quote from this desk and not a rate.
Occupancy is part of eligibility. For an existing building, SBA rules generally require the operating company to occupy at least 51 percent. New construction generally requires at least 60 percent at completion, with a plan to occupy more over time. A loan for working capital, inventory, or a rental investment the sponsor does not occupy is a different program, or no SBA program at all. We will say when 504 does not fit.
What Capital Market Funds does on a 504 file
We help an Arizona owner-occupant see whether a 504 structure fits the building, and we arrange and compare the bank or credit-union first mortgage that sits ahead of the CDC debenture. The CDC packages the SBA piece. The bank underwrites its own first lien. Neither of those jobs is ours. We do not claim a CDC partnership, a preferred-lender status, or an SBA authorization we do not have.
The alternative is a conventional owner-occupied bank loan, one mortgage, often with recourse, and no debenture. Some borrowers want the 504 equity and the long fixed rate on the SBA piece. Some would rather have one lender and a simpler prepay. We compare those paths before anyone spends a quarter in the wrong one.
Arizona occupancy, without a fake closing
The Chandler owner-user office of $15,600,000 has a coworking tenant and does not name a capital source. It is not an SBA 504 tombstone. The Tempe dental cash-out does not say the sponsor occupies the building and does not say SBA. No card on this site is a 504 closing. This page does not state a project cost or a CDC name.
Owner-occupied underwriting that is not SBA lives on Arizona owner-occupied. The bank overview is Arizona bank.