For SBA lenders
Short answer
To pool and sell the guaranteed portion of a 7(a) loan, lenders must comply with SBA secondary market rules, including using SBA Form 1088 and adhering to specific terms for assignment and transfer.
The SBA's secondary market allows lenders to sell the guaranteed portion of 7(a) loans to investors, providing liquidity. Lenders must use SBA Form 1088, Assignment of Guaranty, to transfer the guaranteed portion. They must also follow SBA's regulations regarding loan servicing, reporting, and maintaining responsibility for the unguaranteed portion.
A lender originates a $2,000,000 7(a) loan with a 75% SBA guaranty ($1,500,000 guaranteed). To free up capital, the lender sells this $1,500,000 guaranteed portion on the secondary market, executing SBA Form 1088 to assign the guaranty to the purchaser.
13 CFR Part 120 — Business Loans
Office of the Federal Register · Federal regulation
SOP 50 56 - Lender Participation Requirements
Standard 7(a) Authorization File Library
Last checked 2026-06-13. Official sources control — verify before relying on any rule for a live deal.
Last reviewed 2026-06-13 · SBA sources checked through 2026-06-13. DealRoom analysis of public SBA 7(a) lending records (FY2020–present). Grounded in the current SBA rulebook; verify against the official sources above before relying on it for a live deal. Not legal, tax, or financial advice, and not an approval decision.
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