The SBA and estivate

estivate

ES-tuh-vayt

To pass the summer in a dormant state.

From Latin aestivare (to spend the summer).

_______________________________________________
TIP OF THE WEEK 

SBA did not estivate over the summer. 

There was a substantial change to guidance on affiliation and franchises.  Formerly SBA required review of all franchise agreements of all franchises owned by the franchisee, not just the applicant agreement.  That is no longer the case.

 SBA, along with other federal agencies, is currently developing a comprehensive approach to requests for consent to C-PACE financing on 504 and 7(a) project property.  Keep in mind that the $5,000,000 limitation for SBA financial assistance only applies on a per project basis for clean energy projects.  Borrowers can obtain additional financing even if they have $5,000,000 in existing SBA guarantees.

You also no doubt heard that SBA 504 loans can now be used for debt refinance.

SBA is also putting the finishing touches on another revision to its Standard Operating Procedures.

_____________________________________
Indices:

PRIME RATE= 3.50%

SBA LIBOR Base Rate August 2016 =3.49%

SBA Fixed Base Rate August 2016 = 4.75%

________________________________________

SBA 504 Loan Debenture Rate for August   

The debenture rate is only 2.04% but note rate is 2.077% and the effective yield is 4.093%.

 ________________________________________________
AHEAD OF THE YIELD CURVE 

The Federal Reserve has one more chance to estivate. 

Its next meeting on interest rates will end on September 21^st, the last day of summer.

At its last meeting the Fed included this phrase in a statement released after the meeting: "Near-term risks to the economic outlook have diminished.”

Based on the FOMC statement, the likelihood of a rate hike in September (or November or December) has increased.  The first paragraph was about as upbeat as back in April when many analysts thought a rate hike in June was possible.  So now the key is the data.  In July, U.S. payrolls leaped for a second straight month as employers added 255,000 jobs.  Keep your eyes and ears open for the August report on jobs.  It comes out on the Friday of Labor Day weekend.   If the data is solid, the FOMC might raise rates in September.

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

July                                      255,000

June                                     292,000

May                                       11,000

April                                     123,000

March                                   186,000

February                             244,000

January                               172,000

2015     2,740,000

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.

There has been a recrudescence in job growth, averaging 274,000 over the last two months and 186,000 per month this year.   

Impecunious concerns will motivate the Federal Reserve.  They don’t want to enervate the economy and create any splenetic presentiment.

__________________________________________
OFF BASE

A three weekend approaches!

Here are the officially recognized Federal Reserve holidays:

Labor Day September 5

Columbus Day October 10

Veterans Day November 11

Thanksgiving Day November 24

Christmas Day December 26