Monday, March 30, 2015

The SBA and discursive


1. Jumping from topic to topic; rambling.
2. Proceeding logically, using reason or argument rather than emotion.

From Latin discurrere (to run about), from dis- (apart) + currere (to run).

SBA has revised SBA form 413, the personal financial statement.
Make sure that you are using the current version that has an expiration date of 01/31/2018.

While a personal guarantee will always be required with a SBA loan, guidance for SBA 7(a) loans don’t necessarily require the personal guarantee be secured by personal real estate.


SBA LIBOR Base Rate March 2015 = 3.17%
SBA Fixed Base Rate March 2015 = 5.15%
SBA 504 Loan Debenture Rate for March

The debenture rate is only 2.72% but note rate is 2.76% and the effective yield is 4.799%.       


Will Good Friday be a good Friday?

That’s when the Bureau of Labor Statistics will release its jobs report for the month of March.

February reflected total employment increasing 295,000.  The year-over-year change was 3.3 million jobs. This was the highest year-over-year gain since March of 2000.

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

February                             295,000
January                               239,000

2014     3,116,000
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 all this mean?

I don’t know.

Revisions to employment gains in December and January ended up 18,000 lower than previously reported.  There will be additional revisions with the report for March.

The Federal Reserve at its last meeting on monetary policy slightly downgraded its economic outlook, saying that growth "has moderated somewhat."

It said it will raise its benchmark short-term rate, now near zero, only when the labor market improves further.

There was a lot of consternation after the Fed's policymaking committee dropped a pledge to "be patient" as it considers raising the fed funds rate.

Despite claiming to no longer being patient, Federal Reserve officials lowered their median estimate for the federal funds rate at the end of 2015 to 0.625 percent, compared with 1.125 percent in December forecasts.

The 30-year Treasury bond yield has declined to 2.529% as inflation remains below the Federal Reserve’s 2 percent target, increasing speculation the central bank won’t rush to raise interest rates.

The Federal Reserve unexplainably does not recognize Good Friday as a bank holiday.
It should as its existence can be tied in some ways to Good Friday itself.  
While Good Friday isn't a federal holiday, it is a stock market and bond market holiday.  After being usually closed on Good Friday, 1907 was the final year in which the exchange was open on Good Friday.
That last one was the same year as the infamous Panic of 1907, when the total value of all Big Board stocks plunged by more than a third.   
Traders took it as a sign from God that he didn’t want the exchange open.
By November 1907, the aggregate value of all shares on the NYSE had plunged 37 percent, and at least 25 banks and 17 trust companies collapsed
The crisis ultimately prompted the creation of the Federal Reserve system.
So what is Good Friday?
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."


Thursday, March 26, 2015

SBA 504 Loan Debenture Rate

SBA 504 Loan Debenture Rate for March       

The debenture rate is only 2.72% but note rate is 2.77% and the effective yield is 4.799%.

Monday, March 9, 2015

The SBA and triskaidekaphobia



Fear of the number 13.
From Greek treiskaideka (thirteen), from treis (three) + kai (and) + deka (ten) + phobia (fear).


13 is an important number for SBA loans.

The Code of Federal Regulations (CFR) is a public record of all permanent rules and regulations published by the executive departments and federal agencies of the U.S. government.

The code is broken up into 50 titles that cover a broad range of topics subject to federal regulation.

Title 13 of the CFR deals with business credit and assistance and governs the SBA.

Interpretation of Title 13 of the CFR is left to SOP 50-10-5(G). 


SBA LIBOR Base Rate March 2015 = 3.17%
SBA Fixed Base Rate March 2015 = 5.15%
SBA 504 Loan Debenture Rate for February      

The debenture rate is only 2.46% but note rate is 2.51% and the effective yield is 4.546%.       


Will 13 be the economy’s lucky number?

For the last 12 months in a row, the economy has added at least 200,000 jobs.  This is the longest streak since 1995.

In February, jobs increased 295,000.  New jobs are now 2.8 million above the previous peak.

Over the last week, the 30 year Treasury bond yield has increased 12.4 basis points to 2.841%.

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. The rule of thumb is that an inverted yield curve (short rates above long rates) indicates a recession in about a year.  More generally, a flat curve indicates weak growth and conversely, a steep curve indicates strong growth.

Keep your eyes and ears open for this week’s auction of the 30 year Treasury bond.

Here is what the 30 year Treasury bond has been doing and this week’s interesting little table:
2001- 5.49
2002- 5.43
2003- ND
2004- ND
2005- ND
2006- 4.91
2007- 4.84
2008- 4.18
2009- 3.89
2010- 4.61
2011- 2.89
2012- 2.77
2013- 3.25
2014- 3.97

What does all this mean?

I don’t know.

The yield on the 30-year bond ended the year at only 2.74 percent.  It was at 3.97 percent in January of 2014.

Last month’s auction of $16 billion in 30-year bonds yielded only 2.56 percent.

A flattening of the curve may be an expectation of rising short-term rates at a time when inflation is still low. 

The Federal Reserve meets next week.

Not only is there a word for fear of the number 13, there is a word for the fear of Friday the 13th.  It is friggatriskaidekaphobia.
This has been a tough year for friggatriskaidekapobics.
Friday the 13th appears three times in the 2015 calendar.
February 13, 2015 was the first appearance of the day. Because February is 28 days, expect March to follow the exact same pattern. That means the second Friday the 13th will appear just 4 weeks after the first one on March 13, 2015.
That’s right, this Friday is another Friday the 13th.
Luckily for those with is friggatriskaidekaphobia, there is a long break between the second and third dates. The third Friday the 13th just narrowly missed October, which would have been fitting for the month of Halloween and perfect for a “Friday the 13th” movie marathon. Instead, the date falls two weeks before Thanksgiving on November 13, 2015.
The odds of Friday the 13th happening three times in one year aren’t that uncommon, but it won’t happen again for a while. The last time this happened was in 2012, and the next time it’ll take place is 2026.  Those who are terrified by the idea of three Friday the 13ths will be happy to know that 2016 will only have one in May.

Triskaidekaphobia stems from the belief that the 13th guest to attend the Last Supper was thought to be the same person who betrayed Jesus prior to his death. His death, coincidentally, is said to have occurred on a Friday.

Thursday, March 5, 2015

SBA 7(a) Loan Rate Update


SBA LIBOR Base Rate March 2015 = 3.17%
SBA Fixed Base Rate March 2015 = 5.15%
Lenders can charge up to 2.75% over these indices.