First Merchants Bank: SBA business acquisition lending record
First Merchants Bank (home state IN) approved 183 SBA 7(a) loans to buy existing businesses since FY2018, totaling $208M. The median loan was $752,000. It ranks number 52 of 280 lenders by count and made 0.4% of all SBA acquisition loans nationally.
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What this tells a borrower
- Deal size it funds. Half of its acquisition loans fell between $458,450 and $1,404,150. If your deal sits well outside that band, this lender may be less practiced at it.
- Geographic reach. Indiana is the largest state (15% of loans). Loans appear in at least 15 states, which points to a national lender.
- Industry concentration. Full-Service Restaurants is 6% of its acquisition loans. The mix is spread across several industries.
- Overall 7(a) volume. 898 SBA 7(a) loans of any purpose since FY2020, totaling $682M. 84% of its acquisition loans were processed under the Preferred Lenders Program.
- Franchise share. 19% of its acquisition loans involved a franchise brand, against 18% for all lenders.
- Seasoned performance. Of its loans from FY2018 to FY2021: 4.6% charged off, 31% higher than the 3.5% national average.
First Merchants Bank acquisition loans by year
| Fiscal year | Loans | Total approved | Median loan | |
|---|---|---|---|---|
| FY2018 | 16 | $16.4M | $583,500 | |
| FY2019 | 29 | $27M | $615,000 | |
| FY2020 | 19 | $17.7M | $906,000 | |
| FY2021 | 23 | $20.1M | $598,500 | |
| FY2022 | 12 | $18.3M | $1,053,750 | |
| FY2023 | 23 | $30.3M | $765,000 | |
| FY2024 | 12 | $13.5M | $619,450 | |
| FY2025 | 20 | $22.8M | $794,000 | |
| FY2026 | 29 | $41.7M | $1,027,000 |
How often do these acquisition loans fail?
Of the 87 First Merchants Bank acquisition loans approved from FY2018 to FY2021 (the seasoned cohort, every loan at least about five years old), 4 have been charged off by the SBA, a rate of 4.6% by loan count and 2.4% by dollars. 57 have already been paid in full.
For comparison, the charge-off rate across all SBA 7(a) acquisition loans in the same cohort is 3.5%, so First Merchants Bank is 31% 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 | Indiana | 28 | 15.3% | $13.8M | |
| 2 | Michigan | 20 | 10.9% | $21.2M | |
| 3 | Texas | 15 | 8.2% | $18.5M | |
| 4 | Florida | 13 | 7.1% | $17.7M | |
| 5 | Ohio | 11 | 6.0% | $18.5M | |
| 6 | California | 10 | 5.5% | $10.6M | |
| 7 | New York | 9 | 4.9% | $15.7M | |
| 8 | Illinois | 7 | 3.8% | $9.5M | |
| 9 | Idaho | 7 | 3.8% | $8.5M | |
| 10 | Tennessee | 5 | 2.7% | $11M | |
| 11 | Kentucky | 5 | 2.7% | $8.7M | |
| 12 | North Carolina | 5 | 2.7% | $5.6M | |
| 13 | Arizona | 5 | 2.7% | $4.1M | |
| 14 | Georgia | 5 | 2.7% | $2.8M | |
| 15 | Nevada | 4 | 2.2% | $4.3M |
Industries financed
| # | Industry | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Full-Service Restaurants | 11 | 6.0% | $9.5M | |
| 2 | Limited-Service Restaurants | 8 | 4.4% | $7.7M | |
| 3 | General Automotive Repair | 8 | 4.4% | $4.8M | |
| 4 | Plumbing, Heating, and Air-Conditioning Contractors | 7 | 3.8% | $7.7M | |
| 5 | Beer, Wine, and Liquor Retailers | 6 | 3.3% | $6.4M | |
| 6 | Gasoline Stations with Convenience Stores | 5 | 2.7% | $6.8M | |
| 7 | Snack and Nonalcoholic Beverage Bars | 4 | 2.2% | $7.7M | |
| 8 | Home Health Care Services | 4 | 2.2% | $3.2M | |
| 9 | Drinking Places (Alcoholic Beverages) | 4 | 2.2% | $2.8M | |
| 10 | Supermarkets and Other Grocery Retailers (except Convenience Retailers) | 3 | 1.6% | $6.8M |
That draft favors the seller. We review it for the buyer, line by line.
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Franchise brands financed
| # | Franchise | Loans | Share | Dollars | |
|---|---|---|---|---|---|
| 1 | Pearle Vision | 2 | 1.1% | $2.6M | |
| 2 | Visiting Angels | 2 | 1.1% | $1.8M | |
| 3 | Kumon | 2 | 1.1% | $159K | |
| 4 | Quality Inn | 1 | 0.5% | $4.9M | |
| 5 | Nothing Bundt Cakes | 1 | 0.5% | $4.5M | |
| 6 | Carstar | 1 | 0.5% | $1.9M | |
| 7 | Do it Best | 1 | 0.5% | $1.9M | |
| 8 | Dairy Queen | 1 | 0.5% | $1.2M | |
| 9 | ServiceMaster | 1 | 0.5% | $755K | |
| 10 | Tide Cleaners | 1 | 0.5% | $740K |
Questions buyers ask
Does First Merchants Bank make SBA acquisition loans?
Yes. First Merchants Bank approved 183 SBA 7(a) loans to buy existing businesses from FY2018 to FY2026, ranking number 52 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 First Merchants Bank's acquisition loans?
The median was $752,000, with the middle half between $458,450 and $1,404,150. The national median is $645,250, so this lender's typical loan is 17% higher than the national figure.
Which states does First Merchants Bank lend in?
Indiana (28), Michigan (20), Texas (15), Florida (13), Ohio (11), California (10). Its loans span at least 15 states.
Which industries does First Merchants Bank finance?
Full-Service Restaurants (11), Limited-Service Restaurants (8), General Automotive Repair (8), Plumbing, Heating, and Air-Conditioning Contractors (7), Beer, Wine, and Liquor Retailers (6). The top industry is 6% of its acquisition loans.
How have First Merchants Bank's acquisition loans performed?
Of 87 loans approved FY2018 to FY2021: 4.6% charged off, 31% higher than the 3.5% national acquisition average. Charge-offs reflect the borrowers and industries a lender serves as well as its underwriting.
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Related
- Indiana acquisitions
- Michigan acquisitions
- Texas acquisitions
- Full-Service Restaurants
- Limited-Service Restaurants
- General Automotive Repair
- All lenders
Figures are aggregates of public SBA data. This page is not provided or endorsed by First Merchants Bank.