SBA Prepay Commentary

July 2020 SBA Prepayment Speeds



July 2020


As expected, July’s prepayments were low, continuing to buck the trend of higher speeds usually seen during summer months. Though there was a slight increase over prepayments last month, both Equipment and Real-Estate loan pools are still close to last month’s historic lows. The Paycheck Protection Program (PPP), which as of July 14 has provided loans to 4.9 million businesses with an average loan size of $105,194, recently had its application deadline extended from June 30 to August 8. This extension should help further reduce the number of defaults, at least for the time being, keeping prepayment speeds similarly low in the following months.

Equipment loan pools increased from 5.4 to 6.2 CPR, though results were mixed among vintages. After five months of declines, Real-Estate loan pools experienced their first increase, going from 5.6 to 6.3 CPR, though individual vintages again experienced mixed results.



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

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Brokered Deposit Rate Indications | Weekly, Monday

Investment Alternatives Matrix | Weekly, Tuesday

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





Kevin A. Smith, CFA

SVP, Director Investment Product Strategies

Vining Sparks

KSmith@viningsparks.com


Adam Hofer

Analyst, Investment Product Strategies

Vining Sparks

AHofer@viningsparks.com


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