SBA 7(a) Loan Guaranty Program
Primary lending program of the Small Business Administration
The SBA 7(a) Loan Guaranty Program is the primary lending program of the Small Business Administration, which was created by Congress in 1953 to encourage American entrepreneurs to create successful small business enterprises. It was named for section 7(a) of the Small Business Act and authorizes the SBA to provide business loans to America’s small businesses that otherwise might be unable to secure financing.
Private-sector lenders provide SBA 7(a) loans, a portion of which’s performance is guaranteed by the SBA. Those lenders, in turn, have the right to sell the guaranteed portion of the loan in the secondary market, freeing funds to reinvest in other small businesses in their community.
These lenders and the secondary market purchasers are required to report loan activity to the SBA on the versatile and highly intricate Form 1502. Each step in the SBA 7(a) loan process initiates a different level of required tracking and reporting of information associated with the loan.
Because SBA 7(a) loans often represent only a small portion of the lender’s or purchaser’s entire portfolio, many fail to meet the accounting and reporting demands established by the SBA due either to a lack of resources or the failure to allocate them to this time-consuming task.
Despite the introduction of electronic transmission of many of the forms associated with SBA 7(a) loans, Form 1502 filing continues to be problematic for lenders and purchasers. DISC’s LOANLEDGER(sba) eliminates potential problems, speeds the reporting process and reduces the likelihood of penalties resulting from late or erroneous Form 1502 reporting, and DISC’s Loanledger® with the SBA Module makes it simple, easy to learn and easy to use. LOANLEDGER(sba) takes away the rest of your risk, will vastly speed up the process and makes the 1502 easy to submit on time.