SBA pools pay principal and interest on the 25th of each month, with the exception of first payments on pools formed prior to 10/01/04. These first payments consist of interest only. For pools formed on 10/01/04 and thereafter, SBA pools pay principal and interest on the 25th of each month. Variable rate pool payments have an 85 day delay (e.g., interest from 06/01/05 to 07/01/05 is payable 8/25/05), fixed rate pool payments have a 70 day delay (e.g., interest from 06/15/05 to 07/15/05 is payable 8/25/05).

Record date for SBA guaranteed loan pool certificates is the last business day of the month. The registered holder on the books of the FTA at record date is entitled to that months principal and interest payment.

For example, all holders of record on 06/30/05 will receive the scheduled payment for 08/25/05. Certificate transfers received from 07/01/05 to 07/31/05 will be entitled to the 09/25/05 payable, etc. To calculate the scheduled principal and interest payment due for a particular month, please refer to the following example:

Scheduled principal and interest for 7/25/05 payable; (interest period of 5/1/05 to 6/1/05)

a. Multiply the May 2005 factor for the pool times the original face amount of the individual position, this equals the ending balance for the 6/25/05 payable, which is also the opening balance for the 7/25/05 payable.

b. Multiply the June 2005 factor for the pool times the original face amount of the individual position, this equals the ending balance for the 7/25/05 payable.

c. Subtract the balance calculated in "b" above (7/25/05), from the balance calculated in "a" above (6/25/05). The difference is the scheduled principal for the 7/25/05 payable.

d. The interest payment for this example is a function of the pool's appropriate percentage rate at 5/1/05, multiplied by the balance calculated in "a" above (6/25/05), then divided by 360 days, and finally multiplied by 30 days. (the appropriate pool rate for 5/1/05 is found on the May 2005 factor report).

Should additional questions exist regarding SBA pools, please contact our customer service representative Parbatie Haffiz at (718) 315-5157.