Guidehouse, a leading global provider of consulting, digital, and managed services to commercial and public sector clients, has played a key role in facilitating the launch of the first-of-its-kind multiparty securitization of the unguaranteed portion of Small Business Administration (SBA) 7(a) loans. As Master Servicer and Custodian in the transaction, Guidehouse collects and reconciles loan data, safekeeps sensitive documents, and reports financial performance metrics to investors.
The 7(a) loan program is the SBA’s flagship loan program for providing financial assistance to small businesses. This powerful economic development offers small businesses another avenue for financing while promoting growth and job creation. 7(a) loans are guaranteed by the SBA up to 75% and most of the guaranteed portions are securitized on the secondary market. Creating a scalable and sustainable process for the securitization of the non-guaranteed assets will help increase liquidity and balance sheet strength for key lenders and banks and further support their mandate of facilitating small business lending.
“As the world’s largest scaled consultancy with integrated public sector and commercial businesses, this transaction is a proof point of the Guidehouse operating model,” said Financial Services Leader Jessica Stallmeyer. “Leveraging our deep expertise in SBA lending, capital markets and securitization execution, technology development, and financial services operations, we are pleased to perform a vital role alongside industry-leading counterparties in this revolutionary deal structure that the market has desired for over a decade.”
The new multiparty securitization structure creates economies of scale by collectively pooling approximately $100 million of unguaranteed balances from different small and community-focused lenders across the country. The novel structure will provide community and regional lenders the opportunity to participate in a market previously closed to them and tap into sources of liquidity that were previously unavailable.
“This transaction would not have happened without the visionary leadership of SBA in their ongoing effort to support access to capital for small businesses across the country. By further unlocking the power of U.S. capital markets, it demonstrates that the value of the SBA loan guaranty has never been higher,” said Brian Gagnon, Public Sector Financial Services Leader at Guidehouse. “Our participation in this securitization marks another important milestone in the continuous evolution of Guidehouse’s loan, securitization and trust services servicing business and is a testament to how much our capabilities have grown and continue to evolve.”
Guidehouse’s Financial Services segment helps leading entities of all sizes address evolving risks and regulations, confront new and non-traditional competitors, and adapt to shifting markets and customer demands, all while driving innovation in response to earnings pressures and scarce resources.
To execute this transaction, Guidehouse worked closely with the SBA, Falcon Bridge Capital, an Oakland, CA based Registered Investment Advisor who acted as Deal Manager, Structurer, and Organizer, Goldman Sachs (as Placement Agent), and Jones Day as the firm’s external Legal Counsel.
About Guidehouse
Guidehouse is a leading global provider of consulting services to the public sector and commercial markets, with broad capabilities in management, technology, and risk consulting. By combining our public and private sector expertise, we help clients address their most complex challenges and navigate significant regulatory pressures focusing on transformational change, business resiliency, and technology-driven innovation. Across a range of advisory, consulting, outsourcing, and digital services, we create scalable, innovative solutions that help our clients outwit complexity and position them for future growth and success. The company has more than 16,000 professionals in over 55 locations globally. Guidehouse is led by seasoned professionals with proven and diverse expertise in traditional and emerging technologies, markets, and agenda-setting issues driving national and global economies.
