SALT LAKE CITY - The brave new world of small business loan securitizations will now include loans backed by the Small Business Administration's 504 loan program, thanks to the efforts of Zions First National Bank.

In its first such offering, the Salt Lake City bank privately placed a $45 million securitized pool of loans made under the program with a group of institutional investors.

"We felt we got very good execution on the deal, especially since this was the first one done," said Rick Burthenshaw, a vice president in the investment division at Zions. "It was a lot of work, but we think we have some educated buyers for the future."

The securitization involved the unguaranteed, first-lien portion of loans. Under the program, the bank lender gets a first lien for lending 50% of the funds required by the project.

A second lien is taken by another lender, typically a community development corporation, which lends 40% of the project cost.

This secondary position is guaranteed by the SBA through the issuance of debentures. The remaining 10% is covered by the real estate owner.

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