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SBA 7(a) Gain on Sale

We are the nation’s second largest provider of Small Business Association 7(a), or SBA 7(a), loan sales accounting calculations. We have a thorough understanding of the required accounting and regulatory reporting for SBA 7(a) loans and offer our clients a cost-effective turnkey solution.

Why Choose Us

Proper accounting for the sales of the guaranteed portions of SBA 7(a) loans is relatively complex and requires the seller to:

Calculate the gain on sale based on relative fair value, including any premium required to be shared with the SBA, and derecognize the sold portion;
Calculate and recognize the servicing right asset related to the sold portion;
Record the required discount on the retained portion of the loan;
Amortize the servicing right asset; and
Accrete the discount on the retained portion into income.

Our report includes the journal entries to make on day one and the amounts to record monthly going forward.

We also value SBA 7(a) loan servicing portfolios and this knowledge informs our sales calculations.

Our Approach

We calculate the gain on sale at the loan level and our reports detail each component in the transaction, facilitating our clients’ ongoing accounting. We provide a basis roll-forward file at the loan level that details and summarizes the amount of servicing rights to be amortized and the retained portion discount to be accreted each month.

FEATURED

Insights From the SBA 7(a) Loan Program [White Paper]

This April 2024 white paper examines the historical trends from the SBA 7(a) loan program and analyzes sector-specific loan performance, informing risk management decisions for community financial institutions.

Read More

WHAT OUR CLIENTS SAY

“Midland States Bank has been working with Wilary Winn for many years. Their expertise in Mortgage Servicing Rights, SBA 7(a) Valuations, SBA 7(a) gain on sale calculations, and […]”

–Donald Spring, Chief Accounting Officer & Corporate Controller, Midland States Bank – Effingham, IL