Don’t Let Pricing Lose the Deal

The secondary market continues to offer very attractive premiums for the sale of the guaranteed portion of SBA 7(a) loans. Below are some recent quotes including two “non-traditional” pricing scenarios. Anything other than Prime+ floating adjusted monthly or quarterly is considered non-traditional by the secondary market. However, these loans can be sold at a premium and should be offered when the competitive nature of a deal dictates. Worst case, the bank can elect to not sell and still book an earning asset with an SBA guarantee.

Loan Amount         Term                     Pricing                           Premium

$703,000                  25 years               P+2.75 adj. monthly            18.559%

$282,000                  10 years               P+2.75 adj. monthly            13.73%

$540,000                  25 years               P+1.90 adj. every 5yrs.       4.55%

$600,000                  25 years                6.00% fixed                          3.50%

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