Scott Evans, Senior Managing Director at Government Loan Solutions (GLS), reported at the Secondary Market Summit in Washington, D.C. that for 2018 SBA 7(a) secondary market premiums are down approximately 15% from 2017. The downward trend began in July 2018, when premiums fell to 114 from 116 the prior month. Scott noted that rising interest rates are affecting the supply and demand for SBA 7(a) guaranteed pooled loan portfolios. Rising interest rates result in accelerated SBA-guaranteed loan prepayments, which can result in losses to investors who purchase SBA guaranteed loan pools at a premium when they are prepaid at par.
Of all SBA 7(a) loans, 33% is sold on the secondary market. Historical SBA premiums are shown in the table below.
2018 | Premium* | |||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec | 113.00 | |||||||||||||||||||||||||||||
Nov |
2018 | Premium* | ||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec | 113.00 | ||||||||||||||||||||||||
Nov |
2018 | Premium* | |||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec | 113.00 | |||||||||||||||||||
Nov |
2018 | Premium* | ||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec | 113.00 | ||||||||||||||
Nov |
2018 | Premium* | |||||||||
---|---|---|---|---|---|---|---|---|---|---|
Dec | 113.00 | |||||||||
Nov |
2018 | Premium* | ||||
---|---|---|---|---|---|
Dec | 113.00 | ||||
Nov |
2018 | Premium* |
---|---|
Dec | 113.00 |
Nov |