Cathay Bank: SBA business acquisition lending record
Cathay Bank (home state CA) approved 30 SBA 7(a) loans to buy existing businesses since FY2018, totaling $29.2M. The median loan was $460,000. It ranks number 248 of 280 lenders by count and made 0.1% of all SBA acquisition loans nationally.
Terms signed in the LOI shape the purchase agreement that follows.
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What this tells a borrower
- Deal size it funds. Half of its acquisition loans fell between $316,250 and $826,250. If your deal sits well outside that band, this lender may be less practiced at it.
- Geographic reach. California is the largest state (87% of loans). Loans appear in only 4 states, which points to a regional lender.
- Industry concentration. Beer, Wine, and Liquor Retailers is 23% of its acquisition loans. The mix is spread across several industries.
- Overall 7(a) volume. 118 SBA 7(a) loans of any purpose since FY2020, totaling $133M. 100% of its acquisition loans were processed under the Preferred Lenders Program.
- Franchise share. 17% of its acquisition loans involved a franchise brand, against 18% for all lenders.
- Seasoned performance. Of its loans from FY2018 to FY2020: 4.2% charged off, 18% higher than the 3.5% national average.
Cathay Bank acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 8 | $4.7M | $457,500 | |
| FY2019 | 8 | $6M | $392,500 | |
| FY2020 | 8 | $15.5M | $895,000 | |
| FY2021 | 0 | $0 | - | |
| FY2022 | 0 | $0 | - | |
| FY2023 | 0 | $0 | - | |
| FY2024 | 3 | $1.1M | $336,000 | |
| FY2025 | 1 | $680K | $680,000 | |
| FY2026 | 2 | $1.2M | $614,500 |
How often do these acquisition loans fail?
Of the 24 Cathay Bank acquisition loans approved from FY2018 to FY2020 (the seasoned cohort, every loan at least about five years old), 1 have been charged off by the SBA, a rate of 4.2% by loan count and 0.5% by dollars. 12 have already been paid in full.
For comparison, the charge-off rate across all SBA 7(a) acquisition loans in the FY2018 to FY2021 cohort is 3.5%, so Cathay Bank is 18% higher than the acquisition-loan average. 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.
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States served
| # | State | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | California | 26 | 86.7% | $20.2M | |
| 2 | Arizona | 2 | 6.7% | $7.3M | |
| 3 | New York | 1 | 3.3% | $1.1M | |
| 4 | Texas | 1 | 3.3% | $640K |
Industries financed
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Beer, Wine, and Liquor Retailers | 7 | 23.3% | $3.3M | |
| 2 | Full-Service Restaurants | 6 | 20.0% | $2.4M | |
| 3 | Hotels (except Casino Hotels) and Motels | 4 | 13.3% | $16.1M | |
| 4 | Convenience Retailers | 3 | 10.0% | $1.5M | |
| 5 | Limited-Service Restaurants | 2 | 6.7% | $2.5M | |
| 6 | Coin-Operated Laundries and Drycleaners | 2 | 6.7% | $1.4M | |
| 7 | Pharmacies and Drug Retailers | 1 | 3.3% | $640K | |
| 8 | Supermarkets and Other Grocery Retailers (except Convenience Retailers) | 1 | 3.3% | $482K | |
| 9 | Private Mail Centers | 1 | 3.3% | $445K | |
| 10 | Drycleaning and Laundry Services (except Coin-Operated) | 1 | 3.3% | $250K |
The purchase agreement decides what you bought, not the loan approval.
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Franchise brands financed
| # | Franchise | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Motel 6 | 2 | 6.7% | $8.8M | |
| 2 | Best Western | 1 | 3.3% | $4M | |
| 3 | Days Inn | 1 | 3.3% | $3.3M | |
| 4 | The UPS Store | 1 | 3.3% | $445K |
Questions buyers ask
Does Cathay Bank make SBA acquisition loans?
Yes. Cathay Bank approved 30 SBA 7(a) loans to buy existing businesses from FY2018 to FY2026, ranking number 248 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 Cathay Bank's acquisition loans?
The median was $460,000, with the middle half between $316,250 and $826,250. The national median is $645,250, so this lender's typical loan is 29% lower than the national figure.
Which states does Cathay Bank lend in?
California (26), Arizona (2), New York (1), Texas (1). Its loans appear in 4 states, so it is closer to a regional lender.
Which industries does Cathay Bank finance?
Beer, Wine, and Liquor Retailers (7), Full-Service Restaurants (6), Hotels (except Casino Hotels) and Motels (4), Convenience Retailers (3), Limited-Service Restaurants (2). The top industry is 23% of its acquisition loans.
How have Cathay Bank's acquisition loans performed?
Of 24 loans approved FY2018 to FY2020: 4.2% charged off, 18% higher than the 3.5% national acquisition average. Charge-offs reflect the borrowers and industries a lender serves as well as its underwriting.
Terms signed in the LOI shape the purchase agreement that follows.
Request Engagement AssessmentAlex Lubyansky leads every engagement.
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Related
- California acquisitions
- Arizona acquisitions
- New York acquisitions
- Beer, Wine, and Liquor Retailers
- Full-Service Restaurants
- Hotels (except Casino Hotels) and Motels
- All lenders
Figures are aggregates of public SBA data. This page is not provided or endorsed by Cathay Bank.