1.28.16: SBA 7(a) Premiums Steady Despite Market Volatility

Given the volatility in the debt markets, we thought it worthwhile to revisit loan premiums obtained on the sale of SBA 7(a) guarantees in the secondary market. After post-crash premiums peaked at 118.75 in February 2013, pricing gradually declined during the balance of 2013. Then, throughout 2014, secondary market premiums traded within a tight range of 117.00-117.25. In 2015, loan premiums drifted down slightly to an average of 116.50, but still very healthy levels compared with price declines in other debt-related securities, making the sale of SBA 7(a) guarantees look very attractive right now, as shown in the table below.

2015 Premium*
Dec 116.00
Nov 116.00
Oct 116.00
Sep 116.00
Aug 116.75
Jul 117.00
Jun 117.50
May 117.00
Apr 117.00
Mar 116.75
Feb 116.50
Jan 116.50
Avg. Premium*
2015 Average 116.50
2014 Average 117.00
2013 Average 118.00
2012 Average 116.00
*Based on Prime + 2.75%, Quarterly Reset, 25-year loan term.
This entry was posted in Commercial Lending, Commercial Real Estate Loans, Michael D. Sneden, News & Recent Closings, SBA, SBA 7(a), SBA Guarantee Fee, SBA Guarantee Sales, SBA Loan Processing, SBA Loans, The Banker's Mortgage Conduit, Valuexpress. Bookmark the permalink.

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