Lenders (Conventional/SBA)

Lenders come in all shapes and sizes and they can be as different as night and day regarding their approach and appetite for small business lending. Identifying the right lender is essential to avoiding unnecessary challenges and emotional turmoil associated with the financing process. All lenders apply some sort of underwriting criteria to their loan portfolio to minimize risk of default and satisfy regulatory requirements. Some of the criteria includes 1) loan to value ratios, 2) collateral pledged as security, 3) debt coverage ratio, and 4) borrower’s credit score.

Conventional Lenders

Conventional lenders (most of whom are traditional banking or credit untion institutions), who generally make non-SBA guaranteed loans, lend money based on their opinion of how the proposed loan will fit within the lender’s existing portfolio of loans, assessing the risk factors in comparison to their current loan portfolio to gauge decisions. The loan may be serviced long-term by the originating lender or it may be packaged and sold to the secondary market. Conventional lenders have underwriting standards that typically require relatively high collateral requirements to satisfy the loan-to-value standards.

The SBA

The SBA (Small Business Administration) is a government agency/program designed to help promote investment in small businesses. The SBA guarantees a portion of the loan for the lender. The guarantee can be up to 90% of the loan amount. This means that the lender’s risk is substantially reduced, reducing the pressure on the borrower to provide collateral that could otherwise be considered impractical. SBA lenders are often conventional lenders that have chosen to participate in the SBA program. Depending on the volume of SBA loans lenders can earn the status of Certified Lender or a Preferred Lender.

The Certified Lenders Program (CLP) is designed to expedite the loan application process received from lenders who have a successful SBA lending track record and a thorough understanding of SBA policies and procedures. CLP lenders will perform a complete analysis of the application and, in return, SBA commits to a fast loan decision. SBA reviews the lender's credit analysis as opposed to conducting a second analysis. The SBA still makes the final credit and eligibility decision but, by completing a credit review instead of indepen-dently conducting an analysis, the approval turn-around time is shortened.

The Preferred Lender Program (PLP). As a Preferred Lender, the SBA delegates loan approval, closing, and most servicing and liquidation authority and responsibility to the PLP Lender. Preferred lenders are nominated based on their historical record with the Agency. They must have demonstrated a proficiency in processing and servicing SBA-guaranteed loans.

The borrower interacts directly with a loan originator at the local lending institution in the same way as they would for a conventional loan, but the paperwork is a little different. When considering an SBA loan look for an SBA “Preferred Lender". Working with a preferred SBA lender will help the process go more smoothly.

Free Financing Assistance Is Our Specialty

ABMI specializes in providing assistance in arranging the financing needed to make acquisitions possible. Over 80% of the thousands of transactions we've brokered since 1982 have been completed with financing arranged by ABMI agents/consultants/advisors.

These free financing assistance services include:

ABMI provides acquisition financing advice and services at no extra charge to the Buyer and Seller.
ABMI creates and produces the complete preliminary Loan Request Packet that’s used to show lenders the merits of the project.
ABMI canvasses lenders in our extensive Lender Data Base, and makes the initial contact with the lenders on behalf of the Buyer and Seller, to discover lenders who would be interested in financing the project.
ABMI delivers the preliminary Loan Request Packet to each interested lender.
ABMI follows up with each lender.
ABMI introduces the Buyer/Borrower to interested lender(s).
After the Buyer chooses a lender, ABMI assists the Buyer and Seller with the completion of loan documents needed, including the filling out of SBA or other government loan applications and other documents, when applicable, and the assembling and organizing of any supporting docmentation required by the lender.

To arrange a no-obligation consultation to discuss financing options available for business acquisitions, you may phone ABMI at 913-341-6300 or register with this ABMI web site and we will contact you.

6201 College Blvd., Ste 385
Overland Park, KS 66211
Phone: 913-341-6300
Fax: 913-381-5978
info@abmi.net