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Stop Leaving Money on the Table

Discover how to capitalize on larger deals efficiently with expert insights from Andrew Halladay and Tom Ethen. Learn financing strategies, benefits of SBA programs, and overcome common objections. Find out how Stearns Bank's FASTTrack Program streamlines loan processes. Case studies and examples illustrate successful transactions, including real estate purchases and company expansions.

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Stop Leaving Money on the Table

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  1. Stop Leaving Money on the Table Originating and Closing Larger Deals Presented by: Andrew Halladay – Oakmont Capital Services, LLC Tom Ethen – Stearns Bank N.A.

  2. Oakmont Capital Services, LLC • Commercial Financing & Leasing For Over 18 Years • Capacity to provide financing services to all types of businesses; start-ups to established business owners • We maintain relationships with bank and non-bank lenders thus able to offer competitive interest rates and terms • Fast decisions process; up to $300K in 24 hours or less • Our goal is to work with clients to find the best financing options suitable for growing their business • NEFA Member

  3. Stearns Bank N.A. • 100+ year old financial provider with locations in Minnesota, Arizona, Florida & Georgia. • Independent, employee-owned commercial bank with $2 billion in assets • #1 ranked bank in the nation based on ROA (ICBA Independent Banker – based on banks with over $1 billion in assets) • Nationwide Preferred SBA Lender – one of the most active SBA 7(a) lenders in the nation (SBA.gov) • Nationwide Equipment Finance Division - 17th most active player in the Vendor Channel related to new business volume (Monitor)

  4. Purpose of the SBA Programs To provide reasonable loan terms in situations where financing is not otherwise available

  5. Eligible Types of Business: • “For Profit” Businesses • Provides Products & Services to the General Public • Manufacturing, Service, Hospitality, Retail, Wholesale, Distribution • Investment Only or Passive Businesses Not Eligible • 2 Year Average Net Income of Less Than $5 Million and Tangible Net Worth of Less Than $15 Million

  6. Benefits of the SBA Program to the Small Business: • Longer Amortizations • No Balloon Payments • Low or No Prepayment Penalties • Lower Equity Injections • Loans up to $5 Million • Flexible Structures • Financing multiple types of assets with one loan

  7. Benefits to Loan Originators for using the SBA Program: • Place a transaction that otherwise cannot be done • Produce fee income • Customer retention program • Insure opportunity to retain future lease business • Build Goodwill – “doing right by your borrower” • SBA credit approvals are less volatile • Diversifies your funding sources

  8. Examples of Transactions that fit the SBA Programs: • Real Estate – Construction or Acquisition • Whole Business Acquisition • Partner Buyouts • Debt Refinance • Start ups • Working Capital Requests • Under Secured Transactions • Inventory Transactions • Extended Amortizations • Larger transactions

  9. Common Objections From Originators: • Longer Processing Times • Work only with a SBA Preferred Lender • Look for Lenders with expedited processes • Prepare your client • Lower Fee Income than other loan programs • SBA transactions are typically larger loans …continued

  10. Common Objections From Originators: • SBA Loans usually include taking a blanket lien on all businesses assets • Future transactions can be completed using Purchase Money Security Interest • Higher Transaction Costs • Interest rates are generally lower • No prepayment penalties • Fees are financed over an extended amortization resulting in a lower payment

  11. Stearns Bank’s FASTTrack Program: • Loans $350,000 or less • “Application Only” transaction • Personal Financial Statement • Borrower and Individual Certifications • 1 Year Projection or Historical Financial Statement • 24 Hour Credit Approvals • Flexible Life Insurance and Collateral Requirements • Expedited Closing Process - Docusign

  12. Example: Transportation/Trucking Company • Business formed in 1991 • Existing customer of Loan Originator since 2011 • Loan originator provided 6 contracts for equipment purchases • Frequent follow up with customer netted the following project: company outgrew their existing facility and decided to build a new/larger facility.

  13. Example: What Stearns Bank did for them: Purchase Real Estate....... $400,000 Construct a Building........ $990,000 Working Capital............. $35,000 Other......................... $105,000 (includes closing costs, contingency and interest reserve) PROJECT TOTAL: $1,530,000

  14. Example: Source of FundingBorrower’s Cash................ $33,000 “Cash out” loan provided by Equipment Lender.......... $120,000 SBA 7(a) loan provided by Stearns Bank............... $1,377,000 PROJECT TOTAL: $1,530,000Fee Income generated for the referral source: $13,770

  15. For additional information: Tom Ethen – Stearns Bank N.A. Toll Free: 1-888-320-2899Direct Number: 320-258-4802 Email: tome@stearnsbank.com Stearns Bank is Member FDIC. Equal Housing Lender

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