SBA Prepay Commentary

May 2021 SBA Prepayment Speeds



Prepayments continued to speed up for the month of May, which should come as no surprise given the direction of COVID-19 vaccinations and restrictions along with general seasonal trends. The NFIB Small Business Optimism Index for April came in at 99.8, a third-straight increase. When surveyed about the single most important problem they are facing, only 8% of small business owners responded with concerns over poor sales, the lowest percentage since before the pandemic hit the United States. Looking forward, hopes will likely be high for businesses’ outlook as over 45% of the US adult population has been fully vaccinated against COVID-19 and the CDC no longer recommends social distancing for vaccinated individuals. Given that prepayments historically pick up in the summer, last year notwithstanding, speeds may continue to rise over the next few months as they gear back towards seasonal norms.



Equipment loan pools’ prepayments rose from 8.7 to 11.4 CPR, an increase reflected on a vintage-by-vintage basis. Speeds on real-estate loan pools sped up as well, going from 9.1 to 10.8 CPR, this pick up could also be seen in most individual 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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MBS Prepay Commentary (May) | Monthly, 5th business day

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




Adam Hofer

Analyst, Investment Product Strategies

Vining Sparks

AHofer@viningsparks.com


Kevin A. Smith, CFA

SVP, Director Investment Product Strategies

Vining Sparks

KSmith@viningsparks.com


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