SBA 7(a) Overview

Treasury launched the Small Business Administration (SBA) 7(a) Securities Purchase Program as part of the Obama Administration’s efforts to help small businesses in the wake of the 2008 financial crisis. America’s small businesses play an important job creation role, but during the financial crisis, thousands of small business owners across the country were finding it hard to get the credit they needed to grow their businesses and help drive our economic recovery.

The SBA 7(a) Securities Purchase Program helped facilitate the recovery of the secondary market for small business loans, and thus helped free up credit for small businesses. Under this program, Treasury purchased securities comprised of the guaranteed portion of SBA 7(a) loans, which finance a wide range of small business needs, including working capital, machinery, equipment, furniture, and fixtures. Treasury invested approximately $368 million in 31 SBA 7(a) securities between March and September 2010. These securities comprised more than 1,000 loans from 17 different industries, including retail, food services, manufacturing, scientific and technical services, healthcare, and educational services. Through its purchases, Treasury injected much needed liquidity into this market to help restart the flow of credit, and enabled pool assemblers to purchase additional small business loans from loan originators. Since Treasury made its purchases, the SBA 7(a) market has recovered and new SBA 7(a) loan volumes have returned to pre-crisis levels.