We are making an SBA 7a loan and talking a UCC on contents and the building is located in a flood zone, but not owned by our borrower.

The SFHN does not seem appropriate for this situation, as it states, "The building or mobile home SECURING the loan for which you have applied is or will be located in an area with special flood hazards."

What should we be using for a notice?

Ok. Did a little research and it is my understanding that content coverage is only required when we are taking the building as collateral as security for the loan. However, we can still require it for S&S reasons.

It sounds like in this situation, can we design our own notice or just verbally notify the applicant that we want flood insurance on the contents.

You are correct about the building AND the contents issue. The loan you describe is not subject to the FDPA. Therefore, you don't need to give a Flood Notice. You could, but it's not required. It's a S&S issue just like hazard insurance or any other contractual requirement of your note.