Independent Banker - August 2018 - 32

PORTFOLIO
bank using the SBA 7(a) loan program.
His business broker had referred him to
the regional bank.
" I began asking questions about his
SBA financing and his personal finances, "
Morton says. It turned out the buyer
had sold a company a couple of years
earlier and netted more than $3 million
in cash. He was looking for a business
to buy and was willing to put 20 percent
down. " He had excellent credit, excellent
liquidity, strong net worth and business
management experience, " Morton says.
" The more we talked, the more I knew he
qualified for conventional bank financing
and did not need an SBA loan. "
Going conventional
Advice wanted
Small Business
I
Community banks that offer strategic as well as
financial guidance to small-business owners stand to
benefit. By William Atkinson
n Ash Flat, Ark., $440 million-asset FNBC Bank recently opened its FNBC
Small Business Division. Part of the role of the new division is ensuring that
small-business clients can access all of the tools and resources they need to succeed,
whether this be capital, competitive checking products or business planning.
" Not all small businesses have lending needs, but many of them do need access
to business specialists who can guide them through the areas where they may not
have as much experience, " says Mark Skelton, vice president and senior commercial
lender of the new division. " We want to be true partners throughout the entire
process. Whether they have human resources questions, need someone to review a
marketing plan, or need mentoring on management and leadership, we can help. "
Farmers & Merchants Bank in Miamisburg, Ohio, with assets of $150 million, is
also committed to going above and beyond for its small-business customers. " The
financial advice could be regarding cash flow, loan structure, expense control, "
says Clint Morton, senior vice president and senior lender.
This enhanced service can be a key differentiator between community banks
and larger institutions. A recent example: One of Farmers & Merchants' business
customers was selling his business and recommended to the buyer that he visit
Farmers & Merchants Bank to open a business checking account. The buyer did
visit and told Morton that he planned to finance the acquisition through a regional
32 Q ICBA Independent Banker Q August 2018
Morton calculated that if they switched
gears midstream, withdrew the buyer's
SBA application with the regional bank
and opted for Farmers & Merchants'
conventional financing offer, the buyer
would save at least $200,000 over the
life of the loan. " This is exactly what he
did, " says Morton. " We rushed the underwriting,
approval process, appraisal and
title, and closed in less than two weeks,
meeting the timeframe specified in his
purchase contract. "
That said, strategic advice is not always
what a small-business owner wants to
hear, according to Morton. For example,
an owner might come to the bank to buy
a piece of commercial real estate. " We
might take a look at it and feel that it is
priced too high, " says Morton. " Or, we
might know something, through our
banking connections, that makes us
think the best thing to do is wait and see.
" Several times, we have seen the same
property go through a sheriff's sale or
foreclosure, and then go back on the
market, " he says. " I have had the pleasure
of sitting with one of our small-business
owners at a sheriff's sale and watching
him secure a $450,000-plus property
for $250,000. "
William Atkinson is a writer in Illinois.
Independent Banker - August 2018

Table of Contents for the Digital Edition of Independent Banker - August 2018
