SBA Secondary Market

The SBA secondary market is administered by an outside firm, Colson Services Corp. It is the transfer agent for Small Business Administration 7(a) guaranteed loans. The firm is also the central servicing for section 504 Certified Development Company (CDC) program. Colson provides financial record keeping, data gathering, and reporting. At the end of 2008, its website said that it services over $35 billion in various government debt securities and over 120,000 loan-based instruments.

As the administrator for the SBA 7(a) secondary market program, Colson acts as the conduit between lenders, brokers, dealers and investors for all secondary market processes. In other words, Colson helps lenders who hold 7(a) business loans guaranteed by the U.S. Small Business Administration to minimize risk by selling the guaranteed portions of those loans in an active secondary market. According to Colson, “About $2.5 billion in new loan sales occur each year, and an additional $1 billion of previously sold loans are traded amongst investors annually.”

HISTORY

Based in New York City, the company was founded in 1985. In February of 2002, Colson Services Corp. merged with a unit of the Chase Manhattan Bank, a part of JP Morgan Chase & Co.

Company information can be found here.