October 11, 2022
SBA Hot Topic Tuesday – Coleman’s 2022 BDO Summit
Last week, Coleman held their 2022 BDO Summit to honor Coleman’s Business Development Officers of the Year at the Arizona Biltmore Hotel in Phoenix.
During the Keynote Address by Bob Judge, he discussed that we have not seen a prolonged period of inflation since SBA 7(a) premium and prepayment history started being tracked in 1999. Rising inflation leads to higher interest rates as the Fed tries to bring it back into an acceptable band. In theory, rising rates lead to higher prepayment speeds for floating rate assets such as 7(a) Prime-based loans. Increased voluntary prepayments cause these higher speeds as borrowers move to fixed-rate loans.
Investors expect to pay lower premiums for loans that have a higher expected prepayment speed. This is due to the shortening of the expected life of the loan and the number of payments received to recoup the premium paid. If higher inflation leads to higher interest rates which leads to higher 7(a) prepayment speeds, it stands to reason that 7(a) premiums would be lower.
We would like to congratulate the 2022 BDOs of the Year!
Jared Johnson – First Internet Bank of Indiana
Stacey Sanchez – Momentus Capital/CDC Small Business Finance
Bruce Nguyen – Umpqua Bank
Ken Rosenthal – CDC Capital Markets, LLC
The final 2022 BDO of the Year is Lucas Olson from Mission Valley Bank.
Starting in November, we will be accepting nominations for the Coleman 2023 SBA Lender Professional Awards.