California's Bank of Commerce sold $24.7 million of nonguaranteed portions of Small Business Administration loans last week to General Electric Capital Corp.'s small-business unit.

Bank of Commerce, which has $371 million of assets, will record a $3.2 million pretax gain in the fourth quarter from the sale of the loans made through the SBA 7(a) program.

"It allows the bank to grow faster," said Peter Q. Davis, chairman and chief executive officer of the San Diego-based lender. "We intend to give the Money Store a run for its ranking as the No. 1 SBA lender."

Mr. Davis said his bank, which operates 11 loan production offices in areas where it has no branches, will use the money from the sale to fund new loans. He said loan demand is increasing faster than deposits.

Bank of Commerce expects to make $200 million of small-business loans this year, Mr. Davis said, and expects to lend $300 million next year. He said he plans to sell about one-third of these loans.

The SBA adopted a rule in April that lets banks sell the nonguaranteed portion of SBA loans. Previously, only nonbank lenders were permitted to sell them.

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