1st Source Bank: SBA business acquisition lending record
1st Source Bank (home state IN) approved 43 SBA 7(a) loans to buy existing businesses since FY2018, totaling $25.8M. The median loan was $346,100. It ranks number 191 of 280 lenders by count and made 0.1% of all SBA acquisition loans nationally.
The purchase agreement decides what you bought, not the loan approval.
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What this tells a borrower
- Deal size it funds. Half of its acquisition loans fell between $128,650 and $653,850. If your deal sits well outside that band, this lender may be less practiced at it.
- Geographic reach. Indiana is the largest state (88% of loans). Loans appear in only 2 states, which points to a regional lender.
- Industry concentration. Full-Service Restaurants is 12% of its acquisition loans. The mix is spread across several industries.
- Overall 7(a) volume. 604 SBA 7(a) loans of any purpose since FY2020, totaling $125M. 72% of its acquisition loans were processed under the Preferred Lenders Program.
- Franchise share. 26% of its acquisition loans involved a franchise brand, against 18% for all lenders.
- Seasoned performance. Of its loans from FY2018 to FY2021: none charged off, against the 3.5% national average.
1st Source Bank acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 9 | $2.5M | $50,000 | |
| FY2019 | 12 | $3.3M | $229,750 | |
| FY2020 | 10 | $8.6M | $365,000 | |
| FY2021 | 8 | $8.7M | $564,200 | |
| FY2022 | 0 | $0 | - | |
| FY2023 | 0 | $0 | - | |
| FY2024 | 0 | $0 | - | |
| FY2025 | 3 | $2.2M | $781,200 | |
| FY2026 | 1 | $410K | $410,000 |
How often do these acquisition loans fail?
Of the 39 1st Source Bank acquisition loans approved from FY2018 to FY2021 (the seasoned cohort, every loan at least about five years old), none have been charged off by the SBA. 20 have already been paid in full.
For comparison, 1st Source Bank has none charged off, against the 3.5% average across all SBA 7(a) acquisition loans in the same cohort. Non-acquisition 7(a) loans (every other stated purpose) approved FY2018 to FY2021 charged off at 6.2%.
"Charged off" is the SBA's final loss action on a defaulted loan after collection efforts. It lags default by a year or more, which is why only older cohorts are measured. It is not the same as a delinquency rate, and loans still outstanding can still fail. See charge-off in the glossary.
Terms signed in the LOI shape the purchase agreement that follows.
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States served
Industries financed
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Full-Service Restaurants | 5 | 11.6% | $1.6M | |
| 2 | Plumbing, Heating, and Air-Conditioning Contractors | 3 | 7.0% | $1.7M | |
| 3 | Machine Shops | 2 | 4.7% | $4.6M | |
| 4 | Offices of Chiropractors | 2 | 4.7% | $1M | |
| 5 | Landscaping Services | 2 | 4.7% | $817K | |
| 6 | Beer, Wine, and Liquor Retailers | 2 | 4.7% | $722K | |
| 7 | Limited-Service Restaurants | 2 | 4.7% | $643K | |
| 8 | General Automotive Repair | 2 | 4.7% | $462K |
Seller note standby terms and third-party consents are reviewed before closing.
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Franchise brands financed
| # | Franchise | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Subway | 3 | 7.0% | $60K | |
| 2 | Little Caesars | 1 | 2.3% | $1.2M | |
| 3 | Aire Serv | 1 | 2.3% | $346K | |
| 4 | East of Chicago Pizza | 1 | 2.3% | $229K | |
| 5 | Ace Hardware | 1 | 2.3% | $150K |
Questions buyers ask
Does 1st Source Bank make SBA acquisition loans?
Yes. 1st Source Bank approved 43 SBA 7(a) loans to buy existing businesses from FY2018 to FY2026, ranking number 191 of 280 lenders with 25 or more such loans. The SBA file shows past approvals only; it cannot tell you whether the lender will approve a particular buyer or deal.
How large are 1st Source Bank's acquisition loans?
The median was $346,100, with the middle half between $128,650 and $653,850. The national median is $645,250, so this lender's typical loan is 46% lower than the national figure.
Which states does 1st Source Bank lend in?
Indiana (38), Michigan (5). Its loans appear in 2 states, so it is closer to a regional lender.
Which industries does 1st Source Bank finance?
Full-Service Restaurants (5), Plumbing, Heating, and Air-Conditioning Contractors (3), Machine Shops (2), Offices of Chiropractors (2), Landscaping Services (2). The top industry is 12% of its acquisition loans.
How have 1st Source Bank's acquisition loans performed?
Of 39 loans approved FY2018 to FY2021: none charged off, against the 3.5% national acquisition average. Charge-offs reflect the borrowers and industries a lender serves as well as its underwriting.
The purchase agreement decides what you bought, not the loan approval.
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Related
- Indiana acquisitions
- Michigan acquisitions
- Full-Service Restaurants
- Plumbing, Heating, and Air-Conditioning Contractors
- Machine Shops
- All lenders
Figures are aggregates of public SBA data. This page is not provided or endorsed by 1st Source Bank.