Capital Market Funds · Scottsdale
SBA 504 in Arizona — one page
A 504 project is two loans plus borrower equity. An SBA lender and a certified development company make the loans. Capital Market Funds arranges financing and is not a lender, an SBA lender, or a CDC. Arizona CMB CMB-1047342. NMLS 1445066.
| Who makes the loans | A third-party lender, often a bank, makes the first mortgage. A certified development company makes the 504 loan, funded by a debenture that SBA guarantees. Capital Market Funds is neither the lender nor the CDC. |
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| Typical project split | A common structure is 50 percent third-party lender, up to 40 percent CDC/debenture, and at least 10 percent borrower injection. Injection rises to 15 percent for a new business or a special-purpose property, and to 20 percent when both apply. SBA's SOP controls the file in front of you. |
| Occupancy | Existing buildings generally must be at least 51 percent owner-occupied. New construction generally must be at least 60 percent owner-occupied, with a path to more occupancy over time. An investment property leased to unrelated tenants is a different loan. |
| Debenture term | The CDC debenture is 10, 20, or 25 years. The bank's first mortgage has its own term, rate, and prepayment language. Do not treat them as one coupon. |
| Prepayment | SBA Form 1504 sets a declining premium on the debenture for the first half of a 20- or 25-year term (through year 10) and for the first five years of a 10-year debenture. The premium is remaining principal times the debenture rate times a year factor. It is not 10 percent of principal. The bank note is separate. The estimator shows only the debenture factor. |
| Use | Owner-users buying, building, or improving the real estate they operate from, and certain eligible equipment and refinances the program allows. Job creation or another public-policy goal is part of the CDC's test. This page does not restate a jobs-per-dollar ratio. |
Not a commitment or an offer to lend. Not legal advice. Debenture rate, maximum debenture size, and the servicing-agent payoff are not on this sheet. Reviewed by Craig Hoebing, AZ Commercial Mortgage Banker CMB-1047342 · Updated October 2026.
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