Small Business Administration - Secondary Market 504 1st Mortgage Guarantees Recovery Plan
The SBA’s 504 loan program helps small businesses obtain long-term financing for fixed asset projects. Projects are funded in part by private lenders who provide unguaranteed loans. Sometimes the private lenders who provide these “first mortgage” loans then sell them into a secondary market, but the recession has dramatically slowed this secondary market activity. The Recovery Act will provide a process for private entities to apply for guarantees on pools of 504 first mortgages, for a fee.
By creating more attractive, Federally-backed 504 1st mortgage pools in the secondary market, the SBA will improve liquidity so that banks and lenders will be able to continue providing even more 504 loans. In turn, increases in the number and amount of 504 loans will help small businesses grow and expand through capital improvements, construction and major equipment purchases.
No Data Available
Schedule and Milestones
|Planning Phase includes
• Developing credit subsidy model, determine strategy and program structure
• Conducting Risk Planning
• Completing communication plan and agreement with Lenders and Registered Holder
|Execution Phase includes
• Implementing System changes and establish Secondary Market Authority office
• Appointing Program Director
• Publishing Regulations and issuing notification to lenders
• Implementing Secondary Market Guarantee Authority
|Evaluation Phase includes
• Monitoring Program Performance and report monthly to Congress
Projects and Activities
• Financial Model
• Policy Notices
• Press Releases
• Agreements and Forms
There is no associated funding for this program; the Recovery Act requires that subsidy costs be covered by user fees.
The SBA developed an agency-wide framework to ensure timely and effective implementation of Recovery Act projects to support America’s small businesses. The SBA Recovery Act Steering Committee, comprised of senior SBA leadership, meets every week to review, evaluate and assess the status and results of each SBA-related Recovery Act project.
The Secondary Market Guarantee program is managed by a team. Project teams, which meet several times each week, and supporting offices are held accountable for on-time completion of project milestones and deliverables. Project teams also meet regularly with the Performance Management Office to track metrics and milestones, which are reported weekly to the Steering Committee.
The Steering Committee reviews reports to identify:
• Progress made toward each project milestone
• Factors that have the potential to slow implementation or decrease effectiveness
• Effectiveness of each project measured against expected outcomes
• Success of any implemented adjustments made to strategies, services and project
• Effectiveness of risk mitigation strategies
Cost and Performance Plan
To report progress on the implementation of this project, SBA will regularly update the Project Plan to report on the status of milestone attainment.
The purpose of this program is to serve as a backstop. Therefore, no metric will be established since the guarantee authority will only be used if other programs (e.g., TARP, TALF) are not successful. However, the SBA submits a monthly report to Congress that includes the following monthly and year-to-date data elements: Total dollar amount of guarantees extended, Total dollar amount of guarantees outstanding, defaults, payments on defaults, and a list of purchasers found to have misused guarantees. If the program is required to be activated, this Congressional report will be posted to SBA’s recovery website and additional metrics may be established.
Energy Efficiency Spending Plans
Program Plan Award Types
No Data Available