SBA Prepay Commentary

January 2022 SBA Prepayment Speeds

Prepayment speeds on equipment loan pools increased for the ninth time in ten months while those for real-estate loan pools slowed. Concerns over inflation among small business owners continue to mount. As reported by the NFIB, 22% of respondents list inflation as the single most important problem, the highest percentage since 1981. To give some context about how quickly inflation-related worries are rising, only 1% of respondents listed it as their primary concern in the NFIB’s survey one year ago. For the month of December, 48% of owners reported raising compensation, and 32% said they plan on raising wages within the next three months. These raises correspond not only with inflation concerns, but also those over cost of labor, which rose from 9% to 13% of respondents’ primary problem over the last month.

Equipment loan pools’ prepayments increased from 15.6 to 17.2 CPR, which was reflected among all individual vintages. Prepayments on real-estate loan pools slightly slowed from 15.4 to 15.3 CPR, though results were more mixed 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.

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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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