Harvest Small Business Finance, LLC Closes Its Fifth Securitization of Owner-Occupied First-Lien SBA 7(a) Unguaranteed Portions - $95.2 Million of Offered Notes Rated by Morningstar DBRS

LAGUNA HILLS, Calif.--(BUSINESS WIRE)--Harvest Small Business Finance, LLC (“HSBF”) (http://www.harvestsbf.com), one of the top non-bank originators of SBA 7(a) loans, closed its fifth securitization of the unguaranteed portions of primarily first-lien SBA 7(a) CRE loans. Performance Trust Capital Partners, LLC acted as sole structuring agent and East West Markets, LLC acted as co-manager for the $95.2 million Harvest SBA Loan Trust 2024-1 transaction (“HSLT 2024-1”).

HSLT 2024-1 is only the second REMIC structured securitization to be issued in the SBA space. Harvest utilized Morningstar DBRS, which assigned the ratings of A(low)(sf), BBB(low)(sf), and BB(sf) to the Class A, Class B, and Class C Notes, respectively.

HSBF leaders Adam Seery, Todd Massas and Jason Raefski stated the same message, “HSBF continues to outperform other lenders in its space. We owe this success to our commitment to making high quality commercial real estate loans to sound, well vetted businesses. Moreover, we pride ourselves on setting the standard for performance, pricing and creativity in the SBA securitization market.”

Deal Characteristics

Harvest SBA Loan Trust 2024-1 is Harvest‘s fifth SBA 7(a) securitization and the eighth Harvest issuance overall, including Harvest Commercial Capital. The deal structure features pro-rata payments to the Class A, Class B, and Class C Notes.

The transaction includes a 90-day prefunding period for up to an additional 20% of collateral. Once the 90-day prefunding period is complete, the transaction will have a static collateral pool. As of the October 31, 2024 cut-off date, the collateral consisted of the unguaranteed portions of 361 SBA 7(a) loans with an unguaranteed principal balance of $86.24 million, which represents approximately 25% of the full outstanding principal balance of the SBA 7(a) loans. The collateral pool has an average full loan balance of approximately $1.01 million and a weighted average remaining term of 271 months. The majority of the loans are monthly pay, with an adjustable interest rate based on the Prime Rate, and most of the pool consists of 25-year, fully-amortizing loans. The obligors have a weighted average FICO of 729 and the properties used to collateralize the loans are all commercial real estate with a weighted average original LTV of 77.3%. The weighted average time in business of the underlying businesses is approximately 18 years.

Harvest Small Business Finance, LLC

Harvest Small Business Finance, LLC, a California limited liability company, was created to originate and service loans backed by owner-occupied, multi-purpose real estate, in accordance with the Small Business Administration’s ("SBA") 7(a) loan program. The Company is a significant originator in a number of major markets throughout the United States, pursuant to the authority of a Small Business Lending Company (“SBLC”) license that it acquired in March of 2016. HSBF is majority owned by an affiliate of Medalist Partners, LP, an SEC registered investment manager with approximately $1.8 billion of net assets under management as of November 30, 2024 across strategies in structured credit and asset-based private credit. HSBF was founded in February 2016 and is based in Laguna Hills, CA.