Investors Remain for SBA Loans

The close of TALF proves a non-event on SBA loan sale premiums in April

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The BoeFly Loan Sale Index (SBA) is the leading measure of secondary market sale prices of SBA-guaranteed loans. BoeFly, as the only marketplace connecting lenders with business borrowers and secondary market buyers, is uniquely positioned to provide this important pricing index for market followers.

SBA loan sale prices are an important barometer of the health of small business lending. When investors pay high prices, lenders are incented to originate new loans and inversely, as prices drop, lenders are signaled to slow origination.

The BoeFly Loan Sale Index (SBA) measures actual loan sale data from hundreds of banks - of all sizes and geographies - as they transact with buyers in the market.

In April, the close of TALF proved a non-event as premiums on the aggregate stayed close to the levels seen at the end of Q1. The BoeFly Loan Sale Index edged down by twenty basis points for 10-year loans, while moving up by twenty basis points for 25-year loans. At the same time, record premiums for individual transactions were recorded near the end of the month, with some 25-year Prime + 2.75% loans fetching over 110.5% and 10-year Prime + 2.75% loans trading near 109.3%.

Below is recent price and trend information on SBA loan sale premiums as reported by the BoeFly Independent Pricing Service. BoeFly Transactions shows actual bids received on loans presented for sale through BoeFly and GovGex. The BoeFly Index shows what a Prime + 2 loan of the given term that had just been funded would sell for in each month. The BoeFly Index robustly captures month-to-month pricing trends, while also controlling for factors including the age of the loan at the time of sale.

BoeFly Transactions: April 2010

Deal Term	Premium	Servicing
25	110.16%	1.00%
10	109.3%	1.00%

BoeFly Loan Sale Index P + 2%

Month	10 Year	25 year
Apr	106.2%	108.1%
Mar	106.4%	107.9%
Feb	105.9%	108.2%

About the BoeFly Loan Sale Index (SBA):
The BoeFly Loan Sale Index (SBA) measures premiums paid on secondary market loan sales on a monthly basis. Based on aggregated transaction data from BoeFly, the only marketplace where lenders can connect with business borrowers and secondary market buyers, the Index provides an estimate of the premium a newly issued, 10 or 25 year Prime + 2% loan would fetch. The Index represents aggregated data from actual loan sales by banks. Members of BoeFly have access to full transaction detail on all loans presented for sale. With only slight changes in loan structure driving premiums, lenders rely on BoeFly loan sale data to optimally structure deals in light of what the market is currently valuing. BoeFly is the only service to provide actual bid levels based on loans presented for sale on BoeFly.