Start with the building an investor owns, or with the commercial building a business will occupy. Those are different loans. This page is the second kind, and only when SBA's programs are the path worth comparing. SBA's 7(a) page says the agency does not provide 7(a) loans directly to borrowers. The business applies with a lender. SBA's 504 page says 504 loans are available only through certified development companies, which originate the 504 loan in collaboration with a senior lender. Capital Market Funds arranges those conversations from Scottsdale. It is not the lender and not the CDC. Capital Market Funds is not a Fannie Mae DUS lender.
SBA calls 7(a) its primary business loan program. The guarantee runs to the lender, which is what lets that lender finance a small business that met the credit test. Uses SBA lists include acquiring, refinancing, or improving real estate and buildings. The same page states a maximum loan amount of $5 million. Eligibility on that page includes an operating for-profit business located in the United States, small under SBA size rules, and unable to obtain the desired credit on reasonable terms from non-federal, non-state, and non-local government sources. Those are SBA's factors. They are not a coupon, and they are not an approval from this office. Detail for an Arizona real estate file is on SBA 7(a) arranged in Arizona.
A 504 request is about major fixed assets that help a business grow. SBA's 504 page states a maximum 504 loan amount of $5.5 million and lists 10-, 20-, and 25-year maturities. It says a 504 loan cannot fund working capital or inventory, and cannot fund investment in rental real estate. It also says loans are not made to businesses engaged in nonprofit, passive, or speculative activities. An investor who wants to buy a building and lease it to unrelated tenants is describing rental real estate, which that page excludes. Send that story to a conventional commercial mortgage. Owner-users who do fit should read Arizona SBA 504.
SOP 50 10 is the lender's and the CDC's procedure
SBA's Standard Operating Procedure 50 10 is the procedure for lender and development company loan programs. The SBA lender and the certified development company are the parties who apply it. This desk does not decide eligibility under that procedure, and it does not issue a guarantee or a debenture. If a judgment call sits inside the SOP, the lender or the CDC makes the call. What we can do first is say whether the story you described is even the kind of project those programs describe.
Arizona readers who want the two programs next to each other should use 7(a) versus 504. The short 504 structure note is the 504 quick reference. A Phoenix address that is specifically a 504 project belongs on Phoenix SBA 504. None of those pages is an application, and none of them is a promise that a lender will proceed.
The calculators do arithmetic you type
The SBA 7(a) calculator and the SBA 504 calculator run on numbers you enter. They do not look up a hidden Arizona rate, they do not bind SBA, and they do not bind a lender. A result is a worksheet. The loan, if one is made, is the lender's documents or the CDC's documents.
Craig Hoebing arranges the request under Arizona commercial mortgage banker license CMB-1047342 and NMLS 1445066. A loan on a house a person lives in is not this page. The collateral has to be commercial property. When the label is SBA, the business has to be the occupant the program actually allows, and an SBA lender or a CDC has to be willing to make the loan.
Arizona SBA broker market context
- 7(a) is made by a lender
- SBA's 7(a) page calls the program its primary business loan, states a $5 million maximum, and says SBA does not provide 7(a) loans directly to borrowers. The applicant works with a lender. SBA, 7(a) loans
- 504 is made with a CDC
- SBA's 504 page says certified development companies originate the loan with a senior lender, states a $5.5 million maximum, and excludes working capital and investment in rental real estate. SBA, 504 loans
- SOP 50 10
- Standard Operating Procedure 50 10 is SBA's procedure for lender and development company loan programs. The lender and the CDC follow it. This office does not stand in for them. SBA, SOP 50 10
Which SBA path the business is actually describing
Both programs are arranged. Neither one is a loan from Capital Market Funds. Figures below are SBA's published program notes, not a quote.
| 7(a), made by an SBA lender | 504, made by a CDC with a senior lender | |
|---|---|---|
| Who signs the loan | A participating lender. SBA may guarantee that lender's loan. | A certified development company, together with the senior lender. |
| Real estate use SBA describes | Acquire, refinance, or improve real estate and buildings. | Purchase, construct, or renovate buildings or land, as a fixed asset. |
| What SBA says it will not do | SBA does not make the 7(a) loan directly to the borrower. | Not working capital, not inventory, and not rental investment property. |
Where an Arizona SBA real estate request can go
| Source | When it fits |
|---|---|
| SBA 7(a) | Real estate inside a 7(a) guarantee, made by an SBA lender after that lender agrees. |
| SBA 504 | Fixed assets for an owner-user, made by a CDC and a senior lender. Not rental investment property. |
| Bank | A conventional bank hold when the business can get credit without an SBA guarantee, which is the case 7(a) eligibility itself asks about. |