TBMA Submits Comments to the US Small Business Administration on the Secondary Market for Certain Debt Obligations

The Government Business Loan Committee of The Bond Market Association (TBMA)* provides comments to the U.S. Small Business Administration (SBA)onthe operation of the secondary market for debt obligations guaranteed by the SBA. TBMA believes the most critical problems in the structure and operation of the SBA’s lending programs fall into three main categories:

• accelerating prepayment behavior involving 7(a) loans and pool certificates, and related deficiencies in the structure and enforcement of SBA contract provisions dealing with prepayments;
• the lack of adequate performance data on outstanding 7(a) loans; and
• the lack of suitable structural alternatives to the 7(a) lending program available to borrowers.

*SIFMA is the product of a merger between the Securities Industry Association (SIA) and The Bond Market Association (TBMA) in 2006.