SBA 7(a) Secondary Market Premiums: Where They Stand in 2026

SBA 7(a) guaranteed portion premiums have been in a range of 108 to 112 for most of early 2026, depending on coupon and remaining term. That is a compression from the 110-115 range we saw through much of 2024-2025 when Prime was higher and floating-rate coupons were more attractive.

The driver is straightforward: as the Fed has eased, Prime has come down, and with it the gross coupon on new 7(a) originations. A loan originated at Prime + 2.75% carries a lower coupon today than it did 18 months ago, which means less excess spread for the investor and therefore a lower premium.

What has not changed is the government guarantee. The guaranteed portion still carries zero credit risk to the investor. Defaults still equal prepayments - when a borrower defaults, the SBA pays the investor at par, and the economic effect is identical to a voluntary prepayment.

This means the pricing conversation is entirely about prepayment speed. At a 110 premium, faster prepayments compress yield because the investor has less time to amortize that 10-point premium. The key question for any bid is: what total CPR do you underwrite?

Historical total CPR for the SBA 7(a) book has averaged 10-15% annually, but dispersion is wide. Loans in accommodation and food services (NAICS 72) prepay faster - both voluntarily and involuntarily - than professional services (NAICS 54). Larger loans prepay faster than smaller ones. And lender quality matters: banks with higher chargeoff rates produce loans with higher involuntary CPR.

LoanBook's SBA Lender Quality Analysis now scores 3,500+ originators on a 0-100 composite. The data shows that A-rated lenders produce loans with approximately 2-3% lower annual total CPR than C-rated lenders, primarily from lower involuntary prepayment. That difference translates to roughly 15-25 basis points of yield at current premium levels.

For traders building SBA positions in 2026, the playbook is: focus on lender quality (not just coupon), model total CPR with granularity by NAICS and geography, and recognize that in a falling-rate environment, voluntary CPR will accelerate as borrowers refinance into lower-rate products.