OCC Highlights Advantages, Risks of SBA 504 Loans in New Report

WASHINGTON – A new report from the Office of the Comptroller of the Currency touts the risk and liquidity management features of the Small Business Administration’s 504 loan program.

The report, SBA 504 Loan Program: Small Businesses’ Window to Wall Street, says the loans are “attractive” because they allow credit unions and banks to collaborate in a co-lending product that provides long-term financing to small business customers who would not otherwise be able to find the type of financing product that would allow them to preserve capital for long-term growth. The still not widely-used loans, according to the report, are also ideal because they provide “good collateral” coverage for their retained portion of the loan and facilitate liquidity management through an active secondary market.