Interest in pooling loans backed by the Small Business Administration has continued to pick up steam, with volume in the secondary market jumping 23.4% in the five months ended April 30.
Data from Colson Services Corp., the fiscal and transfer agent for the secondary market in SBA loans, show that more than $1.2 billion of loans backed by the agency changed hands during the period. This compares with just over $1 billion during the same period of fiscal year 1994.
Of the dealers participating in this market, Bear, Stearns & Co. maintained its position as the largest pooler. During the period, Bear Stearns pooled $314.1 million of loans, a 17% increase from the $268.5 million pooled during the same period the year earlier.
Union Planters National Bank of Memphis, which operates under a wholesale trade agreement with Vining Sparks IBG, was first in terms of number of pools arranged, with 61 pools worth $248.5 million.
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Thanks to a new designation from the Small Business Administration, Fleet Financial Group can now offer three-day turnarounds on SBA loan applications.
The Providence, R.I.-based bank company became the agency's first regional preferred lender May 15. Certification lets the bank use its three processing centers to package loan applications and make direct approval of loans backed by the agency.
All paperwork is then forwarded to the SBA's Sacramento, Calif., processing center.
Filomena Soyster, director of Fleet's small business banking unit, said the designation would let the bank guarantee quick replies on SBA loan applications. A similar guarantee is already provided on other small business loan products.
While Fleet was the first to get the designation, it is unlikely to remain alone for long. Mike Stamler, an SBA spokesman, said the agency would make more such designations in an effort to spread processing costs to banks, thus stretching the agency's limited congressional funding.