PrePayment Guidelines

We will provide a prepayment estimate upon request.

Prepayments may only be made on the 3rd Thursday of the month.

The SBA requires written notice from the borrower at least 45 days in advance. Written notice can be faxed to the attention of Carissa Murray at (603) 436-5547; or emailed to cmurray@granitestatedev.com, and should include:

  • The month and date of the 3rd Thursday you wish to payoff
  • The loan number(s) and property address
  • The borrower contact information
  • If a bank or escrow company will be handling the payoff, list their contact information
  • Request must be dated and signed by the borrower

Final prepayment figures are provided by the Central Servicing Agent approximately 3 days prior to the prepayment date for 504 loans.

Prepayment Premiums

The premium is based on a declining scale over the first half of the loan.  On a 20-year debenture, the premium in the first year would be equal to the annual interest on the beginning balance of the loan.  In the second year, the premium would be 90% of the annual interest based on the loan balance at the beginning of the second year.  In the third year, the premium would be 80% of the balance at the beginning of the third year. The premium declines in this manner over the ten year period so that in the eleventh year, there is no prepayment premium.

Prepaid Interest

Although a borrower may prepay a loan in any month with proper notice, the SBA cannot repurchase the debenture until the semi-annual payment date. Therefore, when a borrower prepays a loan, the prepayment includes interest due up to, and including, the next semi-annual payment date. For example, if a debenture’s semi-annual payments are in January and June and the borrower prepays the loan in February, the prepayment will include interest due from February to June. In this case the optimal months to prepay are December or May (i.e. the month preceding the semi-annual date).

Prepayment confirmation will be provided approximately 1 week following the prepayment date.