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  • Business Acquisition Loan Banker Selection in the Pacific Northwest

    Jun 9, 2020

    Many members of the Pacific Northwest business banking community deserve recognition for their hard work facilitating PPP (Paycheck Protection Program) Loans established by the CARES ACT passed with bipartisan support through Congress and signed into law by President Trump that provided a subsistence lifeline to a large number of privately held companies and family businesses negatively impacted by government requirements that they cease operations due to COVID-19.  These loans provide a wonderful example of what is possible when the private & public sector work collaboratively to address a disaster relief need.  Few countries in the world would be able to distribute the funds to business owners as effectively and efficiently as the United States. This was possible because there was political will and an army of knowledgeable, experienced, partners in the banking community prepared to execute under government direction.

    America has a long history of bankers stepping up to serve a business or community in need.  One famous story exists about A.P. Giannini, the founder of the bank that would become Bank of America, setting up a desk on a wharf, because his bank had burned following the San Francisco earthquake of 1906 with signage indicating he was open for business (https://www.wsj.com/articles/an-unlikely-hero-for-1906-1929-and-today-11590764100).  Mr. Giannini lent to almost everyone in need in the aftermath of that disaster, provided half of the need was supplied by the party, so the borrower was vested in the project.  Prudent banking policy and outreach that was the foundation for building a loyal customer base.

    The Pacific Northwest is blessed to have many business bankers possessing Mr. Giannini’s superior customer service and financial acumen. IBA, as a 45 year old, market leading M&A firm in terms of knowledge, experience, & professional ability, has engaged in transactions with virtually every bank with a branch in Washington, Oregon, and Alaska and a select few that serve the region with a virtual model while successfully facilitating over 4200 sales of privately held companies and family businesses.  This high volume transactional activity has allowed IBA to vet the professionals in the banking industry and determine who are the “best of the best”.

    The May 29 issue of the Puget Sound Business Journal included multiple rankings of banks by the performance of their SBA (Small Business Administration) lending departments.  In the world of business brokerage, this is the area where the “rubber hits the road” in terms of performance in the field.  If you are curious which banks successfully underwrote the largest number of loans and distributed the most dollars into the entrepreneurial community, I recommend reading the issue.  If you would like a recommendation from IBA on who to use to finance a business acquisition, we would welcome the opportunity to make warm introductions to decisionmakers with a track record of performance.

    Referencing the list of Largest SBA 7 (A) Loan Lenders (The Small Business Administration loan designed for business acquisitions) by the volume of loans they did during the last government fiscal year the following banks deserve recognition from a customer service, knowledge, experience, and production perspective from IBA.

    1. U.S. Bank – #1 with 197 loans.  This ranking was not a surprise.  U.S. Bank’s team is exceptional.  U.S. Bank has been IBA’s corporate banking partner for operations since 1994.  Change is not anticipated on our end and anyone looking for a business bank should include U.S. Bank in their vetting process.
    2. Banner Bank – #2 with 145 loans. Banner Bank features a deep & talented team of bankers in their SBA loan department.   IBA was honored to provide collaborative education to the business community in a seminar format with Banner Bank during the last fiscal year in Washington.
    3. Columbia Bank – #3 with 132 loans. IBA has crossed the business sale finish line numerous times with Columbia Bank providing the acquisition financing for the deal.  The last fiscal year also had Columbia Bank tapping myself, as the President & CEO of the firm, as a participant on a discussion panel related to selling a privately held company along with a highly respected business attorney and outsourced CFO.
    4. Key Bank – #4 with 96 loans, but less than a million behind U.S. Bank in terms of securing the top total funding amount position ($47.45 to $47.89 million) Key Bank is a consistent high performing bank in the region. Key Bank is a frequent partner with IBA on transactions.  It is not uncommon for top bankers with other lenders to migrate to Key Bank based on their corporate culture and strong administrative & underwriting processes.
    5. Umpqua Bank – #8 with 45 loans. Diminished volume from the top 5, but an equal level of superior customer service, knowledge, and experience from their supportive team.
    6. JPMorgan Chase Bank – #9 with 39 loans. A big bank that is highly selective. Great interest rates, if you pass scrutiny as a client.
    7. Heritage Bank – #10 with 38 loans. High touch, knowledgeable support through the loan process. I had the honor on being on an educational panel for the SBA banking community at their Northwest training day along with a member of the Heritage Bank team.  A banker that educates the bankers is always a good option.
    8. Live Oak Bank – #11 with 33 loans. IBA’s favorite virtual acquisition finance bank in the region.  Their team focuses on larger finance business acquisition deals.  During the last fiscal year, their average loan size was $1.38 million, #1 in the top twenty 7 (A) loan lenders by volume in the Puget Sound region.  Umpqua Bank ($801,896) and Heritage Bank ($816,953) were the only banks with average loan values above $800,000 above Live Oak Bank in the rankings.

    IBA is happy to go to the “dance” with any bank in a deal.  Many buyers come to IBA with an acquisition finance partner already in place.  We also welcome the opportunity to help a buyer shop their loan needs in a group of vetted, high producing bankers.  All bankers and M&A advisors are not created equal.  It is my recommendation that when selecting either you seek knowledge, experience, and a track record of performance.

    IBA, the Pacific Northwest’s premier business brokerage firm since 1975, is available as an information resource to the media, business brokerage, mergers & acquisitions, and real estate communities on subjects relevant to the purchase & sale of privately held companies and family owned businesses.  IBA is recognized as one of the best business brokerage firms in the nation based on its long track record of successfully negotiating “win-win” business sale transactions in environments of full disclosure employing “best practices”.

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