SBA Pools

Prior to 1984, the SBA secondary market was limited to the trading of individual guaranteed loans.  While attractive investments, loans did not appeal to the broad segment of the institutional market made up of investors who were accustomed to fixed-income investments traded on a factor basis and in large block size.

The US Small Business Administration Secondary Improvements Act of 1984 authorized, among other things, the means by which SBA approved pool assemblers could create and market guaranteed loan pools similar to commonly used mortgage-backed securities.

The purpose of the pooling program is to provide an investment vehicle that is attractive to institutional investors not interested in investments under $1,000,000. Approved assemblers are able to form and market pools  of SBA-guaranteed interests. The pool certificates have a timely payment and a full-faith and credit guarantee. Unlike single loan sales, there is no maximum size for a pool certificate. The minimum size is $25,000. The FTA forwards a payment to pool holders on the 25th of the month, regardless of whether payments were received on the underlying loans.

To become an SBA approved pool assembler, the institution is required to demonstrate its financial security and good standing with the SBA. View a list of active SBA Pool assemblers per the SBA.

Please call us with any questions at 1-888-324-2002 or email us at sales@linmarcapital.com