SBA Prepay Commentary

February 2022 SBA Prepayment Speeds

Concerns among small business owners over inflation remain high, as 22% of respondents to January’s NFIB Small Business Economic Trends survey listed it as their primary concern, unchanged from the prior month’s 41-year high. A net 61% of respondents also told the NFIB that they plan to raise their average selling prices, which is the highest reading since 1974. Combine this with the 48-year-record 50% of respondents planning on raising compensation (with 27% planning on doing so in the next three months), 11% claiming cost of labor as their primary worry, and 23% concerned over quality of labor, and it comes as no surprise that inflation is on many small business owners’ minds. How those concerns translate to prepayments remains to be seen in the coming months.

Both equipment and real-estate loan pools saw an increase in prepayments over the last month. Equipment loan pools’ prepayments rose from 17.2 to 21.5 CPR, an increase reflected among most individual vintages as well. Speeds on real-estate loan pools also picked up, going from 15.3 to 18.4 CPR, which was also the case for most pools when viewed on a vintage-by-vintage basis.

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.

Other Helpful Links

Weekly Sector Update | Weekly, Monday

Market Today | Daily

Weekly Recap | Weekly, Friday

Brokered Deposit Rate Indications | Weekly, Monday

Vining Sparks Interest Rate Products Weekly Commentary | Weekly, Monday

Investment Alternatives Matrix | Weekly, Tuesday

MBS Prepay Commentary (February) | Monthly, 5th business day

NFIB Small Business Economic Trends (January) | Monthly, 2nd Tuesday of each month

Adam Hofer

Analyst, Investment Product Strategies

Vining Sparks

Kevin A. Smith, CFA

SVP, Director Investment Product Strategies

Vining Sparks

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