FRANCHISE ACQUISITION ACHIEVED WITH SBA LOAN
THE SITUATION: ENTREPRENUER SEEKS TWO FRANCHISE RESTAURANT ACQUISITIONS DURING PANDEMIC
An entrepreneur identified two franchise restaurants for acquisition during the pandemic and needed to close on the loan prior to the expiration of the CARES Act, which allows for six months of principal and interest payments made by SBA. The restaurant industry has been severely impacted by capacity limits restrictions and a change in consumer in person dining behaviors. However, this restaurant concept focused on carryout and delivery, allowing the business to exceed previous-year performance with consumers gravitating towards this type of restaurant.
The entrepreneur needed a financial partner willing to take time to understand the franchise model for this business and discover that it is performing very well despite the pandemic.
The lending package wasn’t available until two months before the expiration of the CARES Act and the borrower needed a bank that could close the loan prior to that deadline.
The business owner needed financing to acquire the franchise businesses and also working capital to operate in a strong liquidity position post-closing.
THE SOLUTION: 7(A) SBA LOAN FROM FIRST BUSINESS BANK
First Business Bank, an SBA-designated Preferred Lending Partner, provided a 7(a) loan totaling $1,000,000 to acquire both franchise locations and additional working capital for business growth.
First Business Bank’s closing team worked closely with the client and their counsel to finance the transaction prior to expiration of CARES Act.
First Business Bank delivered the financing facility originally proposed and closed in a timely manner.
Using the SBA 7(a) program, First Business Bank’s loan facility was the right loan for this client, allowing them to acquire the franchise businesses.
"Multiple members of the First Business Bank SBA team stepped up and met a very tight timeframe to deliver an SBA loan closing for this borrower. By meeting this deadline, the borrower was provided six months of payment relief from the SBA, which allowed the business to preserve liquidity to get them on sound footing for future success. I WAS PROUD OF OUR TEAM’S ABILITY TO DELIVER ON THE PROMISE MADE TO THE BORROWER.”
— Ryan Black, SBA Business Development Officer, First Business Bank