Momentus Securities aims to deliver additional liquidity to mission-driven lenders on their guaranteed and unguaranteed interests of SBA 7(a) loans.
January 30, 2024 (New York)
Momentus Securities — an investment bank with a social purpose — today announced that the U.S. Small Business Administration (SBA) has approved it as an SBA Pool Assembler in the 7(a) Loan Guarantee Program.
Under the Secondary Market Program, approved SBA Pool Assemblers are authorized to assemble eligible 7(a) loans and market Guaranteed Loan Pool Certificates (SBA Pools). In addition, SBA Pool Assemblers are granted authority to issue and market interest-only investments on these pools known as COOFs. SBA Pools carry the unconditional full faith and credit guarantee of the United States Government.
“This is an opportunity to provide enhanced secondary market liquidity to mission-driven lenders that primarily serve business owners working in underserved communities,” said Jaime Aldama, Momentus Securities’ Head of Capital Markets. “These pools offer institutional investors the opportunity to support and bolster America’s entrepreneurs who are committed to job creation and economic growth – especially women, veterans, people of color, and rural and low-to-moderate income communities.”
7(a) loans are the SBA’s primary business loan program for providing financial assistance to America’s small businesses. However, mission-based lenders often run into scale and liquidity limitations. They need to move loans off their balance sheets, creating more liquidity so that they can make more loans to help the communities they serve.
This work is just one way that Momentus Securities seeks to drive institutional capital to America’s small businesses and nonprofits — and to position “social impact” as a fully investable asset class for institutional investors. This approval by the SBA helps Momentus Securities connect with investors to facilitate these impactful transactions.
“In response to rising borrowing costs, we have seen renewed interest by community-centric lenders in secondary markets as an alternative way to secure capital,” said Tian Wu, Momentus Securities’ Head of Debt Capital Markets. “These lenders can sell their loans for immediate cash that is then used to issue further loans, amplifying their social impact. Momentus Securities is dedicated to helping these underserved lenders by diversifying the investor base for this asset class.”
How Momentus Securities works
Institutional investment capital can help provide more of the backing that mission-based lenders require to support small businesses and community development facilities to open and grow, creating jobs and generational wealth. It can help provide more of the funding that helps people have access to healthy food, education, and health care. And it can help provide more of the resources to ensure that housing is both affordable and available.
Momentus Securities helps its clients raise debt capital via bond and note issuances, private placements, and structured credit transactions. In addition, it provides public and private placement services for municipal issuers, public agencies, private developers, nonprofit organizations, and other mission-driven borrowers. This means that institutional investors have the opportunity to invest in those products – and therefore support communities – at a scale that has not previously been available.
Momentus Securities also provides equity capital raising services to help its clients grow by leveraging an extensive network with impact-driven institutional investors and foundations. Momentus Securities also offers credit rating advisory services in all ratings considerations, including first-time ratings, rating upgrade/defense, capital structure optimization, and debt capacity analysis. And it provides liability management and capital advisory services to help clients optimize their capital structure and improve their financial strengths.
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