Nonbank lenders come in all shapes and sizes. They are factors, commercial finance companies, credit unions, credit card companies and even life insurance firms. Heller, for example, in addition to traditional asset-based lending, also provided Seiff with overadvances (when you're given more money than your assets are worth) and letters of credit for exporting, and even allowed the company to deposit the proceeds of an initial public offering.
"I was concerned that at a bank, I would just be a number," says Seiff. "At Heller, they provided me with a team I could call any time. I knew that would be important to us if we were going to grow quickly."
Morristown, New Jersey-based AT&T Capital Corp. has evolved from a telephone equipment leasing company into the third-largest SBA lender in the country. "Our risk management is different from a bank. We offer greater flexibility and more understanding of asset-based financing," says Robert Neagle, a senior vice president with AT&T Capital's Business Finance Group.
AT&T's loan volume makes the company better able to assess risk, contends Neagle. "We do so many loans, we can capture and evaluate the data on performance by industry and geography," he says. "Consequently, a loan that seems risky to another lender may not be so to us."
Because AT&T is a preferred SBA lender, Neagle says it can also process loans more quickly. Its loans for equipment, construction and real estate financing range from $50,000 to $2 million; working capital loans generally start at $2 million.
The Money Store Inc. has been lending to small businesses since 1979. In 1996, it had a total loan portfolio of $2.3 billion.
"Since 1983, The Money Store has been the nation's largest SBA lender," says Paul Leliakov, president of the company's commercial lending division.
What makes The Money Store different from banks, says Leliakov, is the commercial lending division's exclusive focus on small-business loans. "In a bank, you may not receive the same level of expertise," he says. "Also, some of the financing products we offer may not be available at a bank." The Money Store offers full implementation of the SBA program. For example, it offers franchise loans, whereas some banks do not.
The Money Store's network of field staff operates 60 offices in 49 states. And, like Heller and AT&T Capital, The Money Store is looking to establish a relationship with borrowers that transcends a single transaction. They want to work with business owners on an ongoing basis to respond to their changing financial needs.