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.
|*Based on Prime + 2.75%, Quarterly Reset, 25-year loan term.|