Asset Classes

SBA

Also known as: Small Business Administration, SBA 7(a), SBA 504

status: draft

Small Business Administration. A U.S. government agency that guarantees portions of small business loans, creating a tradeable asset class. SBA 7(a) loans have a government guarantee on 75-85% of principal.

What to watch

The guaranteed portion trades at tight spreads given the government backing. The unguaranteed portion carries full credit risk to the borrower. Check guarantee percentage, servicing quality, and whether you are buying guaranteed, unguaranteed, or whole loans.

Referenced in 17 topics

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