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New Capital for Small Business?

This is more of a behind-the-scenes development, not an actual new source of capital. However, if banks can and will securitize their loans, they reduce the loan exposure on their books, & hence, their risk. When banks can reduce their risks, they will lend more. (But careful. Too much of a good thing is what led to the bank/credit meltdown in late 2007/2008.) – T.C. Wright

A successful securitization of small business loans may be a good sign for the asset-backed securities market.

April 18, 2011

While many parts of the asset-backed securities market are on tenterhooks because of pending regulations regarding home- and commercial-mortgage securitizations, small-business lender Newtek Business Services has completed a rare kind of deal: a securitization of loans backed by the Small Business Administration. The $16 million sale of notes backed by a pool of SBA 7(a) loans was the first securitization of any kind of commercial business loan since the financial crisis, says Newtek chief executive Barry Sloane.

Although the transaction will not necessarily cause a surge in small-business lending, it may be a sign that fixed-income investors are getting hungry for these kinds of instruments once again — if they’re soundly structured.

Read the remainder of the CFO.com article.

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About Tiffany C. Wright

Hi! I,Tiffany C. Wright, am the author of the ebook, "Help! I Need Money for My Business Now!!" and the book "Solving the Capital Equation: Financing Solutions for Small Businesses", available on Amazon. I am the president of Toca Family Business Services, a short-term & project-based interim management & strategic and financial advisory firm, located in Atlanta, Georgia. In the past five years I've helped small and medium companies restructure and obtain over $31 Million in financing and a similar amount in purchase orders and contracts. I have an MBA in Finance and Entrepreneurial Management from the Wharton School of Business at the University of Pennsylvania and a B.S. in Industrial and Systems Engineering from The Ohio State University. Personal: I enjoy investing. I am a prodigious reader of everything from business books, magazines, and newspapers to horror and popular fiction. I read 4-6 books per month. I also love to travel. I've been to 33 countries on 5 continents and lived in Japan for 2.5 years and aim for a foreign locale twice a year. I am also an athlete and run track on the Master's Circuit. The highlight was placing 7th in my age group in the 2007 World Master's Track and Field Championships in Italy.

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The Resourceful CEO, Tiffany C. Wright

the president of Toca Family Business Services, a strategic and financial advisory firm which provides short-term & project-based C-level management. She is the author of Solving the Financial Equation: Financing Solutions for Small Businesses, available on Amazon.

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