Federal Credit Secondary Market Analysis

Guidehouse, a global consultancy in the public and private sectors, was selected by the US Small Business Association (SBA)—a government agency that provides support to small businesses and entrepreneurs—to function as its central servicing agent. Through the SBA 7(a) Loan Guarantee program, portions of small business loans are federally guaranteed and can be sold on the secondary market to provide greater liquidity to lenders. Guidehouse engaged a Capstone team to analyze the effectiveness of the SBA 7(a) Loan Guarantee program, including its loan pools and secondary market, and compare its findings to the market volumes, product structures, and market risks of the mortgage-backed securities of the Government National Mortgage Association (Ginnie Mae). The team produced a comprehensive white paper and presentation that includes data analysis, benchmarks, and actionable recommendations. The Capstone project provides Guidehouse with potential avenues to optimize the SBA 7(a) Loan Guarantee program and secondary market operations, resulting in increased access to credit for many Americans.