SBA Prepay Commentary

June 2021 SBA Prepayment Speeds

Prepayment speeds on both equipment and real-estate loan pools increased for the month of June as expected. Concerns among small business owners over poor sales due to COVID-19 appear to be in the rearview mirror, judging by the NFIB Small Business Economic Trends survey results. Instead, worry over the quality of labor available is mounting. Given that the overall concerns breakdown look similar to pre-pandemic levels (see table below) and that over half of the United States adult population has been fully vaccinated against COVID-19, we may see prepayments begin to follow seasonal trends again as they generally pick up in the warmer months and begin to slow as we head into the fall and winter.

Equipment loan pools’ prepayments increased from 11.4 to 12.1 CPR. This pick up can be seen among most individual vintages. Speeds on real-estate loan pools rose as well, going from 10.8 to 11.8 CPR, though vintage-by-vintage results were mixed.

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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