A first step toward modernizing the Small Business Administration's 7(a) loan program was taken in the recently enacted thrift fund rescue law.

The new law hands more responsibility to banks for liquidating defaulted SBA loans. It also allows a bank to sell the 25% of SBA loans that are not guaranteed by the government. Finally, it directs the SBA to set up a data base to track loans, making it easier to identify loss and default trends.

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