Monday, April 7, 2014

The SBA and ineluctable

Impossible to avoid: inescapable.
From Latin in- (not) + eluctari (to struggle out of), from ex- (out) + luctari (to struggle).


The ineluctable changes to SBA lending often require explanations or corrections.

The SBA recently released SBA Procedural Notice 5000-1310 which provides technical corrections to SOP 50-10-5(F).

For example, lenders no longer need a transcript of payment history on debt to be refinanced if it is not same institution debt.  

Real estate can also be valued at 85% of the market value for the calculation of “fully-secured” meaning no other collateral is required.


SBA LIBOR Base Rate April 2014 = 3.15%
SBA Fixed Base Rate March 2014 = 5.51%

SBA 504 Loan Debenture Rate for March  
The debenture rate is only 3.21% but note rate is 3.26% and the effective yield is 5.289%.

Are higher interest rates ineluctable?

The U.S. has recovered all but 437,000 of the 8.7 million jobs lost as a result of the last recession.

Here is a summary of net payroll employment and this week’s interesting little table of data:

March        192,000
February 197,000
January     144,000
2013     2,074,000
2012     2,193,000
2011      2,103,000
2010     1,022,000
2009     -5,052,000
2008     -3,617,000
2007    1,115,000
2006     2,071,000
2005     2,484,000
2004     2,019,000

What does this mean?

I don’t know.

The economy added 533 thousand jobs in the first quarter this year compared to 618 thousand in the first quarter of 2013

But the labor force has continued to increase over the last 6+ years, and there are still millions of workers unemployed.  The economy still has a long way to go as the number of people out of work for six months or longer is still at 3.739 million .

Friday’s employment report isn’t likely to shake the Federal Reserve from its strategy of slowly winding down its bond-buying program while keeping short-term interest rates pinned near zero well into 2015.

Treasury prices jumped Friday as the market grappled with easing expectations for Federal Reserve rate hikes.

Keep your eyes and ears open for Thursday’s auction of 30 year Treasury bonds.

Last month the Treasury Department sold $13 billion of 30-year bonds at a yield of 3.630% compared to February’s yield of 3.69%.  January’s auction sold at a yield of 3.899% compared to December’s 3.90%.  

On Friday, the 30-year Treasury bond yield fell 4 basis points to 3.585%.

The yield curve is starting to flatten out a bit.  The slope of the yield curve—the difference between the yields on short- and long-term maturity bonds—has achieved some notoriety as a simple forecaster of economic growth.  A flat curve indicates weak growth, and conversely, a steep curve indicates strong growth.

Traders are betting the Federal Reserve won’t raise interest rates any time soon.

Does it seem like Easter comes really late this year?
That’s because Easter always falls on the first Sunday following the full Moon after the vernal equinox.  Got that?
The alignment of the moon and earth cruelly pushed Easter out to late April.  
With no federally recognized holiday until Memorial Day at the end of May, many people look forward to Good Friday.
It’s a holiday for the stock market.   So why not for everyone else?   The day marks the crucifixion and death of Jesus Christ.  How could that possibly be considered good?  
Many believe this name simply evolved—as language does. Originally it was called "God's Friday."   This seems a reasonable conjecture, given that "goodbye" evolved from "God be with you."

Death is ineluctable and sooner or later everyone will have to say goodbye.

1 comment:

  1. SBA loans can be approved in as little as 7 to 10 business days from receipt of a completed application with appropriate supporting information.more information about SBA Loans