START WITH THE ASSETS BEHIND THE LOAN

When a business is preparing to expand, it may need a larger facility, more equipment, and working capital to support growth. These needs are part of the same business plan but serve different purposes. Focusing only on the building can miss important parts of the expansion.

Match the financing to the project

SBA’s loan programs reflect that distinction. The 504 program supports major fixed assets, including eligible buildings and long-term machinery and equipment, but cannot fund working capital or inventory. The 7(a) program allows a broader range of uses, including real estate, equipment, and working capital. The appropriate structure depends on the project and the borrower’s eligibility. SBA 504 program SBA 7(a) program

A policy clarification effective July 4, 2026 illustrates how the programs can work alongside each other. SBA describes a business using 7(a) financing for working capital and light equipment while using 504 financing for its facility. The notice addresses sequencing, with the 7(a) approval preceding the 504 approval, and explains that an outstanding 7(a) balance does not reduce available 504 capacity, except as specified in the notice. It also confirms that a 504 project may include multiple eligible assets financed simultaneously, subject to applicable limits. Eligibility and program conditions still apply to each loan. SBA policy notice 5000-879058: Lenders should apply current program guidance to each transaction. Current SBA SOP 50 10

Define the full scope of the assignment

For lenders, the best starting point is the expansion plan. What space will the business use? What equipment will be added or moved? What operating needs must be funded as the business grows? Breaking out these uses helps everyone see the full project, not just the property purchase.

Bring an SBA lending perspective to the process

Nationwide offers commercial services including real estate appraisals for SBA and commercial loans, equipment valuations, environmental assessments, and surveys. If your expansion involves multiple assets, our commercial team can help you identify the right services and products for your needs. Kevin Green’s banking background includes SBA loan origination, giving him firsthand insight into small-business financing needs and the importance of accurate, timely valuations. Explore Nationwide’s commercial services

A strong nightly rate can make a short-term rental look promising. For lenders, the more useful question is what supports that income over time. Recent industry commentary has highlighted the gap between a property’s long-term market rent and the revenue it may generate through short stays. Understanding that difference starts with the assumptions behind the number. American Association of Private Lenders | Are STR Scalable

Go beyond the nightly rate

Nightly pricing, gross rental revenue, and long-term market rent answer different questions. Multiplying a nightly rate by every day in the year assumes uninterrupted bookings at that price point. Seasonality, vacancy, and operating costs complicate that picture. Gross revenue also should not be confused with income remaining after expenses. American Association of Private Lenders | Are STR Scalable

Consider a simple illustration: at $250 per night, 12 booked nights produce $3,000 in revenue, while 20 produces $5,000, before expenses. Neither result tells you what the home would rent for under a long-term lease. The example is hypothetical, but it shows why the booking assumption deserves as much attention as the rate.

Select comparisons that match the rental scenario

Comparable properties should reflect the rental experience being analyzed. Location, bedroom count, guest capacity, and amenities help identify relevant STR comparisons. A nearby listing with very different accommodations may offer little insight into the subject property’s likely performance.

A useful review question is whether the selected properties would appeal to similar guests during the same time period. Reviewing monthly patterns, rather than relying only on an annual average, can help explain how stronger and weaker periods contribute to the projection. AirDNA STR Comps

Set up the assignment with clear expectations

Before ordering, clarify whether the assignment calls for a real-property appraisal, an STR income analysis, long-term market rent, or separate deliverables. Document available operating history and identify the assumptions and limitations behind projections.

For teams evaluating STR-specific reporting, Nationwide’s STRpro offers a customized form with rental market analysis and a comparative grid, supported by a dedicated STR operations team and specialized review.

Review a sample to see how the format may fit your next assignment.

FHA is accepting feedback through November 6, 2026 on proposed modernization of its Minimum Property Requirements. Posted September 22, the proposal would consolidate property-eligibility guidance and revise parts of property-condition assessment and appraiser observations. HUD Drafting Table

The draft includes proposed changes to condition and quality ratings, utility observations, and attic and crawl-space observations. These topics may warrant review by appraisal, underwriting, and quality-control teams, particularly where current procedures or training address those areas. The proposed changes do not remove the need to identify readily observable deficiencies. HUD proposed guidance

The distinction matters: this is a proposal, not an implemented policy change. HUD states that existing policies remain in effect until amended and that draft guidance cannot be used for FHA-insured mortgages until finalized. Do not revise current loan treatment on the assumption that the proposal has taken effect. FHA INFO 2026-22

The takeaway: Review the draft for potential operational implications and consider whether to provide feedback by November 6. Continue following existing FHA requirements. Review the proposal and feedback instructions