CMBS vs. SBA 504 Loans

CMBS loans and SBA 504 loans are two incredibly popular forms of commercial real estate financing, but they have several important differences. CMBS loans, also known as conduit loans, are issued by lenders, pooled with other similar loans, and then sold on the secondary market. In comparison, SBA 504 loans, which are guaranteed by the Small Business Administration (SBA), are 50% financed by a lender, and 40% financed by a Certified Development Company (CDC), a local non-profit group intended to increase economic development in a specific area.