As an SBA lender, you’re likely aware of the active secondary market for SBA loans. Through this market, you’re able to sell the SBA-guaranteed portion of a loan to increase your liquidity and allow your institution to make even more loans to small businesses.
This is an area of SBA lending that brings up many questions. When you’re working with a lender service provider (LSP) like Prudent Lenders, you’ve got an SBA expert on your side that can help you understand the process. Here are just a few of your frequently asked questions on selling SBA loans on the secondary market.
Q: Once the loan is closed, how is the loan sale handled in the secondary market?
Once the loan is closed, you’ll need to submit:
- The Loan Sale Information spreadsheet
- The Lender Information spreadsheet (if this is your first loan sale with Prudent Lenders)
Once we receive the Loan Sale Information sheet, we’ll be able to solicit bids through our partner, GLS, on your behalf. Bid requests are normally returned within a day.
We’ll provide the results at that time, and you’ll be able to decide where you’ll sell the loan. We always recommend awarding the SBA loan sale to the highest bidder.
Once a sale is approved, you’ll receive the necessary documents to complete the transaction. From that point forward, you’ll work directly with the investor that won the bid.
GLS solicits bids from the following investors:
- Vinings Bank
- BMO Harris
- SunTrust Bank
- Ray Jay
- Signature Bank
- TD Bank
- Wells Fargo
- Hanover Bank
- South Street Securities
- Cantor Fitzgerald’s Investment Banking
When the bids are solicited, the investors will expect a quick response and for one investor to be awarded the bid. If you are not interested in selling, we can provide you with a rough pricing estimate without going through the bidding process.
Q: Can we use brokers that we have done business with in the past?
Yes, you’re welcome to use brokers that you’ve done business with before. However, by doing so, we’re unable to assist with documentation to complete the sale. Instead, your institution would work directly with your preferred broker.
Q: Are there fees associated with selling the loan off in the secondary market?
Yes, effective January 1, 2022, GLS charges $400 per loan sale. However, no additional fee is charged by Prudent Lenders.
Q: Does Prudent Lenders handle the certification documents to the buyer of those loans? Or do we, the lender, need to take care of this?
Prudent Lenders does not offer this service. As the lender, you’ll need to handle/complete the certification documents.
If you have more questions on selling SBA loan, Prudent Lenders can help
As your lender service provider, we’re ready to answer any question you have on all aspects of the SBA lending process. If you’re looking to sell an SBA loan on the secondary market, we can help! Get in touch with us today to learn more.