SBA and small business MONDAY MOTIVATION, and the data to support it! It’s time to FIGHT inflation through entrepreneurship by acquisition! A thread on an unbelievable opportunity to own hard assets and a breakdown of #s showing individuals who are doing it.
Many of the younger generations want to leave the “corporate” world. However they lack direction, some are trading stocks, chasing crypto, and launching start-ups (high failure rate). Trust me I know from experience, I failed countless times starting companies, trading, and buying crypto. As an entrepreneur myself, I’m excited to see this shift in our society take place before our very eyes, HOWEVER, I think there is a better (less risky) path to success. Here is what I’m suggesting and what I’m currently pursuing……
Thousands of people are chasing the freedom of entrepreneurship by utilizing the SBA program and taking a leap to acquire small businesses and commercial real estate.
Yes, average joe’s (like myself) are becoming business owners and RE owners by using the SBA program. It’s not a get rich quick, it’s not easy, it's difficult to operate a company, and even harder to finally close a deal. However, it's feasible and it's attainable.
SBA provides a favorable leveraged product by allowing borrowers to acquire hard assets with very little upfront investment.
HERE ARE THE YTD NUMBERS of individuals and banks who are making it happen.
Monthly SBA #S, results based on the latest report released on April 30, ###-###-#### The primary focus was to get an actual quantitative scope of the SBA (Biz acquisitions and commercial real estate) world. Let's nerd out!
Ranked, # of Approved Loans (7a & 504):
- 2854 Huntington National
- 1109 Wells Fargo Bank, National Association
- 1082 US Bank @
- 873 Newtek Small Business Finance
- 866 TD Bank
- 777 Manufacturers and Traders Trust Company
- 605 Live Oak @LisaGForrest @EndresenHeather
- 436 Cadence Bank
- 401 KeyBank
- 395 United Midwest Savings Bank
Notables: 12th 315 JP Morgan 18th 183 Byline @SBALenderLyons 48th 67 First Internet Bank 78th 42 Fund-Ex @SBA_Ray 145th 24 First Business Bank @SBA_Matthias (prior bank and has recently branched out to create his own firm) Let's give congrats to Matthias!
Ranked, Approved Dollars $ (7a & 504):
- $829m Live Oak
- $567m Newtek Small Business Finance
- $433m Huntington National
- $337m Celtic
- $203m Byline
- $196m Wells Fargo
- $156m Readycap Lending
- $149m Enterprise Bank
- $147m KeyBank
- $140m Cadence Bank
High-Level #S for all Banks, SBA (7a): 24,572 Total Approved Loans YTD 4,268 April 22 vs 4,656 March 22 $2.2 billion total approved dollars
High-Level #S for all Banks, SBA (504): 5,948 Total Approved Loans YTD 613 April 22 vs 832 March 22 $598 million total approved dollars
Average Approved SBA Guaranty % 69%
Thoughts: If you look at 7a #s vs last year or YoY, total loans approved are down but not by much. Total approved dollars is actually up about $600m.
What these numbers don’t show is the segmentation between 7a business acquisitions, Commercial RE, Lines of Credit, equipment financing, etc. If anyone knows where to locate this data, please share.
Small, medium-sized, and regional banks own this SBA space. With the exception of JP Morgan and Wells Fargo.
The rising interest rate environment is having little effect on SBA approvals at the moment, however, that could change in the future.
% of loan amount guaranteed by the SBA has decreased this year but is expected as government perks were guaranteeing a higher % of the loan in 2021).
In the 7a world, banks are on pace to surpass last year’s numbers from BOTH, a total # of deal perspective AND total dollar amount perspective.
Multiples are coming down, probably helping banks underwrite deals with less risk.
This is not a path for EVERYONE, this is NOT easy, and it does involve risk as most investments do. Do your due diligence, do your research, pick up the phone, reach out to numerous experts who have acquired, and speak to many lenders to get an idea of the different credit boxes in which a bank is willing to lend.
Contrary to the news outlets, we are still living in exciting times as Banks are still lending on SBA!!