The SBA and PROlong

Prolong

proh-lawng

to make something last a longer time

from Latin pro "forth" + longus "long"

 

_____________________________________________

TIP OF THE WEEK

 

A continuing resolution prolongs funding the federal government through November 17, 2023.

 

Then another continuing resolution or a full year funding package will need to be passed or the government will profligately go procumbent.

 

There is also a propitious promulgation that now the guarantee fee for SBA 7(a) loans of $1,000,000 or less is 0.00%.

 

For loans over $2,000,000 the State Small Business Credit Initiative (SSBCI) and State Small Business Loan Guarantee Program offers a higher percent of guarantee and a lower guarantee fee.

 

_________________________________________

 

Indices:

PRIME RATE= 8.50%

________________________________________

SBA 504 Loan Debenture Rate for September

 

For 20 year debentures, the debenture rate is only 5.39% but note rate is 5.466% and the effective yield is 6.867%.

For 25 year debentures, the debenture rate is only 5.41% but note rate is 5.464% and the effective yield is 6.812%.

_______________________________________________

AHEAD OF THE YIELD CURVE

 

The Federal Reserve protended interest rates at the fed funds target rate range at 5.25 percent to 5.50 percent.

 

The Federal Reserve description of economic conditions was described as "solid" which was an upgrade from "moderate" in their previous release on monetary policy.

 

Job gains are downgraded slightly as "slowed" but remaining "strong".

 

Employment for the month of September will be released on Friday.

 

Keep your eyes and ears open for the Federal Reserve release on Industrial Production and Capacity Utilization.

 

The Federal Reserve watches manufacturing closely.    One of the Federal Reserve’s preferred measures of inflation is the capacity utilization rate.

 

Normally the Fed is concerned about inflationary pressures when the capacity utilization rate is about 82%.

 

Here is what capacity utilization has been doing and this week interesting little table of data:

 

2007- 81.5

2008- 79.9

2009- 66.9

2010- 74.8

2011- 76.7

2012- 79.0

2013- 77.8

2014- 78.8

2015- 76.5

2016- 75.4

2017- 76.2

2018- 78.5

2019- 79.7

2020- 74.5

2021- 76.4

2022- 80.0

2023- 79.7

 

What does all this mean?

 

I don’t know.

 

Last month capacity utilization moved up to 79.7 percent, in line with its long-run (1972–2022) average.

 

Durables manufacturing nearly ¾ of all manufacturing is up 0.1 percent in August with some small gains nearly offset by a 5.0 percent drop in motor vehicles production.

 

The Federal Reserve does not meet again on monetary policy until Halloween.

 

 

__________________________________________

 

OFF BASE

 

This weekend is prolonged!   A three day weekend comes up thanks to Columbus Day on October 9th.

 

Columbus Day is an official Federal holiday recognized by the Federal Reserve.

 

Originally celebrated on October 12th to celebrate Columbus’s arrival in the Americas on October 12th, 1492, the Uniform Monday Holiday Act moved permanently to a Monday Washington's Birthday, Memorial Day and Columbus Day as  federal holidays.

 

As a result, Columbus Day is always celebrated on the second Monday in October.