A comparison of Projected and Actual Purchase Rates
Some comments have been made about the “questionable” accuracy of the Dun & Bradstreet (D&B) data provided to lenders through SBA’s lender portal, particularly about perceived "discrepancies" between the Projected Purchase Rate (PPR) of the 7(a) portfolio and the portfolio’s actual 12 month purchase rates. It was assumed that the PPR was not very predictive of actual future purchases since the Projected Purchase Rate of loans in the 7(a) portfolio was different from the actual purchase rate 12 months later. However, this presumption is based upon a misunderstanding of the two figures. In actuality, the PPR is very predictive of future purchases.
The PPR is a projection of the next 12 month actual purchase rate for loans disbursed (“on the books”) and scored as of a specific point in time. So, for example, the September 30, 2006 PPR projected purchases for the October 1, 2006-September 30, 2007 period is based upon the outstanding SBA share of loans disbursed as of September 30, 2006. On the other hand, while the Actual 12 Month Purchase Rate as of September 30, 2007 measures the same 12 month period, it is based upon the outstanding SBA share of loans disbursed as of September 30, 2007, which was a much higher balance than the September 2006 outstanding SBA share. The actual 7(a) portfolio 12-Month Purchase Rate calculated as of September 30, 2007, adjusted to exclude those loans disbursed during the October 1, 2006-September 30, 2007 period, was 2.368 percent. In comparison, the September 30, 2006 PPR was 2.363 percent.