SBA Prepay Commentary

September 2021 SBA Prepayment Speeds

Prepayment speeds on equipment loan pools increased for the sixth straight month, while those for real-estate loan pools experienced their first decrease since March. As can be seen in the chart below, it appears that speeds may be following the seasonal trend of waning during the fall and winter months, albeit still at lower levels than recent pre-pandemic years. Availability and quality of labor is an increasing concern among small business owners, as reported by the NFIB, with 50% of business owners saying they have job openings they are unable to fill, topping last month’s 48-year record high. Inflation is another area of growing worry, as 13% of respondents listed it as the single most important problem facing their business.

Equipment loan pools’ prepayments increased slightly, going from 14.4 to 14.5 CPR, though results were more mixed on a vintage-by-vintage basis. Prepayments on real-estate loan pools declined for the first time in six months, decreasing from 14.5 to 13.4 CPR, though results were mixed among 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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Adam Hofer

Analyst, Investment Product Strategies

Vining Sparks

Kevin A. Smith, CFA

SVP, Director Investment Product Strategies

Vining Sparks

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