go-to banks in the search fund community

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March 24, 2023

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management in Tel Aviv-Yafo, Israel

was wondering what the go-to banks in the search fund community are. given latest events with SVB and the VC-backed tech industry concentration, i was wondering if such exposure exist in the search fund community too.

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Reply by a searcher
from University of Pennsylvania in Atlanta, GA, USA
Hi Eilon, a good place to start is the SBA list of lenders by volume of SBA loans issued.

https://careports.sba.gov/views/7a504LenderReport/LenderReport?%3Aembed=yes&%3Atoolbar=no

For that table, keep in mind that is all SBA loans not just SBA loans for business acquisitions or search funds.

The lenders I have seen most active in the Search Fund community (Twitter, here on Searchfunder, at conferences /happy hours) are Live Oak Bank (Lisa Forrest) and First Bank of the Lake (Bruce Marks).

I have not heard anything regarding SVB / recent banking turmoil that would change the approach above but maybe someone else here has!
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from University of Texas at San Antonio in San Antonio, TX, USA
Find and research local banks in your trade area. Regional / Local banks always have a leg up on the competition due to less red tape and more creativity. Also, these banks are generally well capitalized and have good longstanding liquidity. Not all locals will be good at funding LBO’s or more cash flow driven credits but you will be surprised that some do and do it well. Focus on banks that have been around for many years and interview the banks as you would any business you are looking to partner with. Utilize the UBPR sources online and look into their balance sheet. If the bank has 60% of their balance sheet in long duration bonds at low rates, 97% of their deposits uninsured, and a large concentration in funding to tech start-ups, probably better to move on to the next one :).



good luck!
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