There is an active secondary market in the loans guaranteed by the Small Business Administration. This market was created to increase the attractiveness of small business lending to the lending community. Through the market, lenders are able to sell the guaranteed portion of SBA guaranteed loans to investors, thereby improving their liquidity and increasing their yield on the unguaranteed portion of SBA loans.
In addition, the secondary market provides a hedge against future liquidity problems, because the guaranteed portion of an SBA guaranteed portfolio may be readily sold by the lender. The market also allows a lender to meet the credit needs of a local small business community by importing capital from other parts of the country. Additional information on the SBA's secondary market program is available from the SBA's Secondary Market and 504 Sales Branch; call (202) 205-6024.
