SBA Prepay Commentary

August 2021 SBA Prepayment Speeds

Prepayment speeds for both equipment and real-estate loan pools increased for the fifth straight month, which appears to follow the seasonal trend of late-summer months. Also worth noting, a recently-effected rule change by the SBA regarding debt refinancing may prevent speeds from experiencing the same dip they historically experience in the fall and winter, but it is still too early to tell. In regard to small business owners’ confidence and concerns, worries over the availability and quality of labor continue, as 49% of owners reported to the NFIB that they have job openings they are unable to fill, breaking a 48-year record. Inflation is another area concern, with 11% of respondents naming it as the single most important problem facing their business, though worries do appear to be easing.

Equipment loan pools’ prepayments increased from 14.0 to 14.4 CPR, with most individual vintages experiencing an increase. Prepayments on real-estate loan pools also picked up, going from 12.2 to 14.5 CPR, though results were mixed among vintages.

Equipment Loan Pool CPRs

1Equipment loan pools have original WAMs between 8 and 13 years

Real-Estate Loan Pool CPRs

2Real-estate loan pools have original WAMs greater than 18 years

SBA Prepayment Tables (PDF)

Prepared according to methodologies described by SIFMA.

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Adam Hofer

Analyst, Investment Product Strategies

Vining Sparks

Kevin A. Smith, CFA

SVP, Director Investment Product Strategies

Vining Sparks

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