KBRA Assigns Preliminary Rating to Harvest SBA Loan Trust 2021-1

Kroll Bond Rating Agency (KBRA) assigns a preliminary rating to the Class A Notes issued by Harvest SBA Loan Trust 2021-1, a securitization backed by the unguaranteed portions of small business loans made pursuant to Section 7(a) of the Small Business Act of 1953.

Harvest SBA Loan Trust 2021-1 is Harvest‘s (the “Company”) third SBA 7(a) securitization and the Company’s fifth securitization including the Commercial Capital Loan Trust securitizations. The transaction features a payment waterfall, whereby collections after expenses and interest payments will turbo principal until a target overcollateralization level of 36.7% is achieved.

The securitization includes a 90-day prefunding period for up to an additional 15% of collateral. Once the 90-day prefunding period is complete, the transaction will have a static collateral pool. As of the March 31, 2021 cut-off date, the collateral consists of 240 SBA loans (the “Loans”) with an unguaranteed balance of $72.1 million, approximately 25% of the full outstanding current principal balance. The collateral has an average full loan balance of approximately $1.2 million and a weighted average remaining term of approximately 288 months. All the loans are amortizing, monthly pay, floating rate, and originally 10-year, 15-year or 25-year term loans. The obligors have a weighted average FICO of 723 and the properties used to collateralize the loans are all commercial real estate with a weighted average loan-to-value (“LTV”) of 77.8%.

The transaction structure includes a single class (Class A Notes). Credit enhancement includes overcollateralization, a cash reserve account, and excess spread. The Class A notes initially benefit from 20% overcollateralization. The priority of payments will turbo the Class A Notes until a 63.3% advance rate (36.7% overcollateralization) is achieved, at which point any additional funds will continue through the priority of payments.

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Disclosures

Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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