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Benefits of Selling GGL in the Secondary Market:
- Improves liquidity position: The guaranteed portion can be converted to cash, which can be used to und additional loans, creating opportunities to develop new business relationships.
- Allows smaller institutions more flexibility to compete with larger lenders.
- Increases profits with income from the premium at the time of sale.
- The servicing fee on the sold portion for the life of the loan.
- Offsets at-risk capital from unguaranteed portion holdings.