Link Funding has assisted banks with access to the SBA and USDA guaranteed programs in a variety of scenarios. Some are just "plain vanilla" loans, while others present more challenges. Here are some of our many success stories.
USING THE SBA PROGRAM FOR REO PORTFOLIO PROPERTY
A bank had taken back a hotel property after the borrower defaulted on his conventional loan. The bank had been operating the property through a receiver while it marketed the property. A qualified buyer was located. With Link's guidance about the specialized SBA program requirements for this type of loan, the bank made an acquisition loan to the purchaser and obtained a 75% SBA loan guarantee. In addition to solving a significant problem with its portfolio and obtaining the credit enhancement of the guarantee, the bank received premium income of 7% of the guaranteed portion, plus 1% continuing fees for loan servicing.
EXTENDING ADDITIONAL CREDIT TO EXISTING CUSTOMERS
A bank client had recently started a new business and sought additional capital for expansion. A conventional loan would have been outside the bank's lending parameters but the bank thought that the loan made sense. So it turned to Link to help structure the deal with a SBA guarantee. This enabled the bank to retain a solid existing customer whose business will continue its growth path with the additional capital.
MAKING A LOAN TO AN EXISTING CUSTOMER ALREADY AT THE BANK'S CREDIT LIMITS
A successful group which specialized in building and leasing property to a national retail chain approached one of our bank clients to provide funding for the construction of a new unit. The bank already had total loans to the group on its books that were close to the bank's credit limits. With the use of a USDA B&I loan, the bank was able to make the loan, as only the unguaranteed 20% of the loan counted against the lending limit. A valuable client was retained, the bank received a guarantee commencing with the construction process, as well as a significant premium when the final funding occurred.
REFINANCING "SAME INSTITUTION DEBT"
A bank client had a multi-store restaurant franchisee with a very successful track record. The bank had a real estate loan and equipment loan on its books for one of the customer's locations. The bank had renewed these notes several times for one-year or two-year terms. With Link's help, the bank was able to restructure these loans using the SBA guarantee program to provide the customer with fuller-amortizing, longer-term notes that provided improved cash flow to the borrower. The bank received premium and servicing income as well as kudos from a happy customer.
To talk about how your institution can take advantage of these programs, contact us and we can show you how simple and profitable these lending programs can be.