Residential Mortgage Banking Overview
Small Business Market – 7(a)
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READY CAPITAL.
⚫The SBA (1953) is an independent federal agency
that guarantees loans to small businesses
Eligible participants are banks except for 17 non-
bank licenses approved since the 1980s
Eligible small businesses have under $15M net
worth and $5M net profit
The SBA's lead program is the 7(a) which
guarantees 75% of eligible loans up to $5M @
Prime + 300bps maximum rate
Originator sells 75% pro-rata interest in loan.
pooled into SBA Certificates & sold at ~9%+
premium retaining 25% and servicing rights
OUTSTANDING 7(a) BALANCE (BILLIONS)
7(a) LOAN APPROVALS (BILLIONS)
$120
$40
$103.9 $107.1 $108.4
$36.8
$100
$95.1
$92.4
$97.3
$35
$86.2
$30
$78.8
$25.8 $25.8
$25.9
$80
$24.5
$25
$23.6 $22.8
$60
$20
$15
$40
$10
$6.8
$20
$5
$0
$0
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