Loan Story

Turn down... For What?




Adam's Car Wash

Adam and Jen purchased a piece of land in Maine in late 2019, and had plans ready to build a new car wash. The problem was they needed to finance the entire construction project, the equipment, and get some working capital. After a couple of years of searching for a lender, and getting the city to extend their deadline for starting construction, they met a local guy that worked for a nationwide SBA lender. They were on board with the deal, but needed more cash injection from them as they weren't totally comfortable with their collateral position on a start-up car wash. There just wasn't a way for the borrowers to come up with enough cash to make the credit shop happy.

I was on a call with this loan officer in the fall of 2021 discussing some new deals. He brought up a transaction his credit shop just couldn't get comfortable with (Adam and Jen) and asked if I could find the loan a home. Everything he told me about the deal was SBA eligible, and I felt like I could get the project done. After speaking with the borrower, I knew I could make it happen.

I pitched the deal to more than a few of my lenders, most of which had the same thoughts as the original lender, but there was one that was willing to dive deeper.

We had an appraisal on the land, including the site work that they had paid for, that was valued juuuust over 10% of our estimated project. My pitch was to use the appraised value of this land as the borrowers injection, and they issued a proposal exactly how I had it structured. At this point, I'm a little worried this lender is just issuing the proposal for the sake of issuing a proposal, but they hadn’t ever done that before so we rolled with it

There was plenty of back and forth on the construction costs, contingencies, and equipment costs. And any increase in costs would change our plan for the required injection. We received the bank's commitment in January 2022, but the project ultimately had to go through General Processing (read: the bank can approve it, but SBA has the final say-so). We had a few minor questions from SBA, nothing that would get the loan declined, and had the final approval shortly after

All-in-all, I wasn’t nearly as involved in this project as I normally am. It took a while, but I don’t think it could have gone any smoother. I’m grateful for a lender that trusted me to take his clients. I’m grateful to the clients for trusting me to find them a new lender. I’m grateful for the new lender taking on the project. And I’m grateful for the SBA industry as a whole. I can be dangerously optimistic on occasion, but that’s how I do what I do.