SBA and Owner Occupied CRE Lending Report

October 24, 2013

Liberty SBF 5-Year Rates Dip to 3.99% for Owner Occupied Loans

Return from the shut down

Small Business Administration officials returned to work after a 16-day furlough to discover a queue consisting of several hundred loan-guarantee applications last Thursday. During the shutdown, around 700 entrepreneurs had submitted $140 million in loan applications through the SBA’s 7(a) loan program.

Jeanne Hulit, SBA acting administrator, said her team is “working hard to resume normal operation of our programs” but acknowledged that “some things may take a little time to get back up and running.”

At Liberty SBF we applaud the hard work of the SBA in resuming business and processing the back log created by the impasse in Congress. We continue to offer our bridge loan product to assist borrowers facing unforeseen closing delays as a result of the government shut down. Click here to learn more about our bridge loan.

Non-bank lending to small businesses continues to rise.

The Financial Times reported that non-bank lending to small businesses has hit its highest level since 2008 as more enterprises turn to alternative sources of credit such as peer-to-peer lenders and invoice financing. Recently, PayPal rolled out a loan program and we commented on the effect these alternative lending markets have on the business community and traditional financial institutions. Click here to read the story.

SBA prepayment & default rates rise.

In August of this year, prepays to SBA loans broke through 8% for the first time since July 2010. In that same month, both defaults and voluntary prepayments rose, pushing overall CPRs to levels not seen since prior to the credit crisis with defaults rising by 46% from 1.44% hitting 2.10%. Voluntary prepayments rose above 6%, gaining 15% from July to August reaching 6.73%.

Preliminary data for next month suggests that voluntary prepayments will fall back below 6% while overall CPRs might drop back to the 7% range where both measures have spent most of this year.

Click here for a look at our SBA Rate Sheet from Oct. 22, 2013.