SBA Funding and Pari Passu/Conventional lending up to $8,000,000

August 14, 2024

by a lender from Kutztown University of Pennsylvania in Mount Joy, PA 17552, USA

Search Funder family,

After a brief hiatus, I'm back with some exciting news. Northwest Bank, a national SBA lender, is now offering financing for transactions as large as $8,000,000. Our aim is to empower the lower middle market space, which often faces financing challenges. We structure these deals with SBA financing up to $5,000,000 and Pari Passu or conventional debt up to 3 million. Despite the potential lack of collateral in many of these deals, we're committed to a thorough scrutiny process, ensuring we identify the following strengths in every deal.

Excellent Credit
Very strong Direct or Indirect experience - We will look at grad students looking to purchase a business, but they will have to have strong guarantors who have personal liquidity and will PG
Strong Liquidity from borrowers and guarantors - PFS
Debt Service Coverage of 1.40 to 1.50 in the current year and recent tax year and 1.25 in prior years
Strong personal guarantors, which could include investors in the business who own under 19.99%

Give me a call at###-###-#### or email if you're interested in discussing your project. I'm here to do everything I can to get your deal approved, or at the very least, provide you with a fast 'no'. Your success is our priority.

Reply by a professional
from University of Virginia in Holmes, NY 12531, USA

^redacted‌, thanks for sharing. Certainly good news for high-quality prospective borrowers. While in my experience, one does see banks offering this structure here and there, still much more standard for lender to insist that additional debt be subordinated (just for anyone who may not be aware, pari passu = the loans rank equally in terms of capital stack seniority - the other bank is likely to be more willing to loan at all, and on better terms, if it knows it can share senior secured status).

Reply by a lender
from Kutztown University of Pennsylvania in Mount Joy, PA 17552, USA

Thanks Matt, We are happy to get creative with structures and would even have the 2nd note in 2nd lien position with a different amortization and term.

+3 more replies.

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