The SBA and PROsopopoeia

 prosopopoeia

pruh-so-puh-PEE-uh

 1. A figure of speech in which an imaginary or absent person is represented as speaking or acting.

2. A figure of speech in which an inanimate object or something abstract is represented as possessing human form: personification.

 From Latin prosopopoeia, from Greek prosopopoiia (personification), from prosopon (face, mask), from pros- (facing) + ops (eye) + poiein (to make).

Literally prosopopoeia is the putting of speeches into the mouths of others.

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TIP OF THE WEEK

Prosopopoeia can be used to take some of the load off the communicator by placing an unfavorable point of view on the shoulders of another person or object.

SBA lenders often do that by blaming SBA when something can’t be done.

In the case of refinancing debt with a SBA 7(a) loan, the debt being refinanced has to have been used for a purpose originally eligible for SBA financial assistance.   Loans used to pay taxes are typically not eligible nor is debt to a shareholder.   Seller financing for the sale of a business must be at least two years old.  If the seller debt had been on standby, the clock does not start for the two year time period until payments to the seller begin.

Seller financing for the sale of owner user real estate has no two year requirement to be eligible for SBA refinancing.

The long awaited pending SBA implementation guidance on 504 debt refinancing is being released.

 

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Indices:

PRIME RATE= 3.25%

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SBA 504 Loan Debenture Rate for June

For 20 year debentures, the debenture rate is only 1.29% but note rate is 1.31% and the effective yield is 2.770%.

For 25 year debentures, the debenture rate is only 1.47% but note rate is 1.49% and the effective yield is 2.887%.

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AHEAD OF THE YIELD CURVE

 

Is inflation starting to get out of control?   The markets say otherwise.

 

The Federal Reserve does not plan to raise interest rates any time soon, right?   The markets say otherwise.

 

This prosopopoeia with the market was evidenced as the news came out that the consumer price index rose 0.6 percent for the month of May, the Treasury was selling $24 billion in 30 year Treasury bonds.

 

The 30 year Treasury bond high yield was awarded at 2.172 percent, down 22.3 basis points from last month's auction rate and the lowest rate awarded for the bond in four months.

 

This almost quarter percent drop in long term bond yields seems to concur with the Federal Reserve anticipation that transitory factors will boost inflation readings and there is no need to consider raising interest rates.

 

Keep your eyes and ears open for this week’s Federal Reserve Open Market Committee meeting.

 

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:

 

DEC21- 0.18

DEC22- 0.35

DEC23- 0.85

DEC24- 1.37

DEC25- 1.77

DEC26- 2.08

 

What does all this mean?

 

I don’t know.

 

The December 2023 Eurodollar rate was at 0.665.  It is now up to 0.85.

 

Prognostications proliferate over the protean slope of the yield curve but now a procellous propugnaculum might be prospicient.

 

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OFF BASE

 

A classic example of prosopopoeia occurred when Yogi Berra, speaking of a former Yankees manager, said: "If Miller Huggins was alive today, he'd be turning over in his grave"

 

Hopefully there is no spinning in the grave over Juneteenth becoming a national holiday.   Juneteenth is June 19th and has long been celebrated as the end of slavery in the United States.  When the Civil War ended, on June 19, 1865 Union soldiers traveled to Galveston, Texas, to spread the news. There, the troops found Black men, women and children still enslaved, either because news of the Emancipation Proclamation hadn’t reached them or the local white officials simply ignored it.

 

June 14th is Flag Day.  It commemorates the adoption of the flag of the United States on June 14, 1777, by resolution of the Second Continental Congress.

 

June 20th is Father’s Day.    It is actually a national holiday in several countries.

 

June 20th is also the summer solstice- the longest day of the year.   It is also Beach Boy Brian Wilson’s birthday.

 

With our propensity to enjoy days off, it would seem appropriate to lump all these days together into a three day weekend.  Keeping with the spirit of the Uniform Monday Holiday Act, the third Monday in June could be a national holiday.

 

This year the Fourth of July is on a Sunday.  The Federal Reserve Board of Governors is closed on July 5, 2021.