Sunday, August 26, 2012

The SBA and refulgent


refulgent

ri-FUHL-juhnt

Shining brilliantly.

From Latin refulgere (to radiate light, to reflect), from re- (back) + fulgere (to shine).

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TIP OF THE WEEK 

Sales of small buildings across the U.S have risen this year to the highest since 2008 as buyers take advantage of prices that have yet to rebound from the property crash and increased access to financing.

The sales volume for properties of less than $5 million jumped 41 percent in May from a year earlier to $4 billion, Boxwood Means reported this month. Of the 122 metropolitan areas that the company tracks, 88 posted year-over-year increases. Total volume for the first five months of 2012 was $20.3 billion, the highest for the period since 2008.

Boxwood's sales price indices mirror the diversity of the small-cap CRE market by combining and tracking closed sales among various small commercial property types that range from conventional office, industrial and retail uses and also include secondary property types often associated with owner-users and single tenants such as free-standing buildings, street retail, mixed use, restaurant buildings, commercial condos and more.

A SBA loan is the refulgent option to financing these buildings!

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Indices:

PRIME RATE= 3.25%
SBA LIBOR Base Rate August 2012 = 3.24%
SBA Fixed Base Rate August 2012 = 3.97%
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504 Debenture Rate for August  

The debenture rate is 2.37% but note rate is 2.41% and effective yield is only 4.45%. 

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AHEAD OF THE YIELD CURVE 

When the Federal Reserve meets, people actually write down what they say.

The minutes of the Federal Reserve’s Federal Open Market Committee July 31-August 1 meeting show many officials favored pushing the timetable for any increase in record-low short-term rates beyond the Fed's current target of late 2014 at the earliest.
 Some think the target will be extended to mid-2015.  The minutes said Fed officials agreed to defer any action on extending the timetable until their next meeting in September.

So where then are interest rates going?

Eurodollar futures settle at a three- month lending rate that has averaged about 22 basis points more than the Fed's target over the past 10 years.

Here is a summary of what the market expects for Eurodollar futures based upon the pit-traded prices at the Chicago Mercantile Exchange:

DEC12- 0.38
DEC13- 0.48
DEC14- 0.68
DEC15- 1.11
DEC16- 1.70
DEC17- 2.26
DEC18- 2.67
DEC19- 2.95

What does all this mean?

I don’t know.

It would appear that interest rates are never ever going up.
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OFF BASE

Not only does the Federal Reserve tell us where interest rates are going, they also let us know when we can take a day off.

According to them, here are our remaining holidays for the year:

Labor Day           September 3   
Columbus Day   October 8       
Veterans Day    November 12  
Thanksgiving     November 22  
Christmas Day   December 25

That means we have a three day weekend coming up!

It also means that major league baseball is in its home stretch and Adam Dunn has a month to be refulgent and do what no baseball player has done in 85 years.

Dunn wields his bat like the hammer of Thor and leads all of baseball in home runs, walks, and strikeouts. 

The last player to lead all of baseball with the most home runs, the most walks and the most strikeouts was Babe Ruth in 1927.

Walks, homers and strikeouts are called baseball's three true outcomes.

Three truth outcomes.  That sounds kind of cool and they are the only plays in baseball which no one other than the pitcher and batter go at it.


Monday, August 20, 2012

SBA 504 Debenture Rate for August

504 Debenture Rate for August  

The debenture rate is 2.37% but note rate is 2.41% and effective yield is only 4.45%. 

Sunday, August 12, 2012

The SBA and somnolence

somnolence


SOM-nuh-luhns


A state of sleepiness or drowsiness.

From Latin somnus (sleep).

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TIP OF THE WEEK 

No somnolence with SBA lending!

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Indices:

PRIME RATE= 3.25%
SBA LIBOR Base Rate August 2012 = 3.24%
SBA Fixed Base Rate August 2012 = 3.97%
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504 Debenture Rate for July  

The debenture rate is 2.38% but note rate is 2.42% and effective yield is only 4.46%. 


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AHEAD OF THE YIELD CURVE 


At the most recent meeting of the Federal Open Market Committee, they said that “economic activity decelerated somewhat over the first half of this year.”

The smart money does not seem to be losing too much sleep however.

At last week’s $16 billion auction of 30 year Treasury bonds, the yield rose to 2.76 percent.

This is an eight week high after it had touched a record low 2.44 percent on July 26.

Here is what the 30 year bond has been doing:

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- 2.76


Wait a minute, why no numbers for 2003, 2004, and 2005?

One month after the 9/11 attacks, the Treasury 30 year bond is discontinued. When the Treasury mothballed the 30-year bond in 2001, experts speculated it was trying to drive down long-term interest rates, which had remained stubbornly high while the Federal Reserve was slashing short-term interest rates to revive the economy. When the Treasury discontinued the 30-year bond in 2001, its yield fell 35 basis points in one day. Why? A shrinking supply of the 30-year Treasury bond caused increased demand to drive rates down.

What does all this mean?

I don’t know.

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.

The yield curve is getting a little steeper.

Sleep well.

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OFF BASE

Somnolence seems to go hand in hand with the dog days of summer. 

And just what is a dog day?  Is it so hot, you just lay around like a lazy dog on a hot summer day? 

The name comes from the ancient belief that Sirius, also called the Dog Star, was out during the day heating things up during the summer.  This is the bright star you see rising in the east at dawn.  From late July through August it closely tracks the Sun. 

The name "dog star" came from the ancient Egyptians who called Sirius the Dog Star after their god Osirus, whose head in pictograms resembled that of a dog.

Sirius was up in the sky at the same time as the Sun and ancient Egyptians and Romans argued that it was responsible for the summer heat by adding its heat to the heat from the Sun.

Monday, August 6, 2012

SBA 7(a) Rate Update

Indices:

PRIME RATE= 3.25%
SBA LIBOR Base Rate August 2012 = 3.24%
SBA Fixed Base Rate August 2012 = 3.97%

Lenders can charge up to 2.75% over these indices.