Liquidity Solution: Multi-Participant Securitization Program of Unguaranteed Portions of SBA 7(a) Loans
Objective: Leverage existing regulations specific to securitization of unguaranteed portions of SBA 7(a) loans to enable multiple approved SBA lenders to pool their unguaranteed loan portions together in the same transaction (“Multi-Participant Transaction”), rather than having to do so individually, which is costly for smaller lenders. This will provide additional liquidity to participating SBA 7(a) lenders of all sizes. (SBA 13 CFR § 120.420 – 120.425)
Benefits of Program: A Multi-Participant Program will enable smaller institutions to collectively access capital markets at lower cost and achieve desired risk management, liquidity, and efficient use of capital to further aid small businesses in their communities. This will directly support the development, growth and health of small businesses across the country.
Lenders will be able to pool their unguaranteed portions onto this platform, avoiding having to develop and fund this capability individually in-house.
Enabling small SBA participating lenders access to the securitization platform will further strengthen SBA’s ability to serve and encourage small business activity in minority, low and moderate-income communities, rural areas, as well as underutilized business zones.
The program will allow SBA lenders to more effectively manage risk on their balance sheet and continue to actively participate in lending programs that provide capital infusion to the existing and new small businesses without building expensive expertise individually.
Information: For loan eligibility, risk retention requirements, securitization structure details and next steps, please contact:
Sunil Chowdry, CFA
President & CEO
Falcon Bridge Capital
Multi-Participant Securitization Program for Unguaranteed Portions of SBA 7(a) Loans
SBA Multi-Lender Securitization Platform