Meet Nimi Natan
He’s President & CEO of Gulf Coast Small Business Lending. While Nimi may not be your run of the mill, suit & tie banker, he loves SBA lending and especially enjoys working directly with our borrowers. Our affinity for complicated and unusual deals starts at the top and permeates our culture.
Under Nimi’s leadership we deliver SBA & USDA loans across the country, to business owners of all types, in a wide variety of industries, who are as committed to their families, businesses, and communities as we are to ours. We work closely with our borrowers and referral sources to understand their needs and tailor solutions.
We aren’t your everyday, ordinary SBA and USDA lenders.
When Business Debt Becomes a Burden, It May Be Time to Restructure
One of the most expensive mistakes a business owner can make is to take on loans without having a proper plan for repayment. If you wait to make a plan until repayment becomes difficult, you may have already lost your best refinancing options.
Debt should support the business you run today, not just the company you were when you borrowed. Companies change – revenue grows, new expenses arise, and debt taken on during a difficult period can linger long after the original conditions improve.
That is often when someone asks me about refinancing. But you have to understand something: the question is not simply whether an SBA loan can replace existing debt; it is whether replacing that debt will leave the business stronger, more liquid, and better able to operate.
Start With the Problem, Not the Interest Rate
When business owners consider refinancing, the first thing they often look at is the interest rate. While that matters, it is only one part of the decision.
I would start by analyzing what is wrong with the existing debt:
- Is the monthly payment putting pressure on cash flow?
- Was a short-term loan used to finance something that will benefit the business for many years?
- Has the company accumulated several obligations with different payment schedules?
- Or is a revolving credit facility becoming difficult to manage?
These are different problems, and they may require different solutions.
A loan should match the purpose it finances. If a business uses short-term borrowing to pay for a long-lived asset, the repayment schedule can put unnecessary pressure on its working capital. The asset may take years to generate its full economic benefit, while the debt demands repayment much sooner.
I also want to know whether the business can comfortably service its obligations after refinancing. Lower payments are useful, but not if the borrower is simply extending the debt without addressing the underlying financial problem.
Cash Flow Is the Point of the Exercise
For me, the real question is what the business can afford to pay while still having enough money to operate, invest, and handle unexpected expenses.
Consider a company that has taken on expensive financing to bridge a temporary cash shortage. The immediate problem may have passed, but the repayment burden remains. If eligible, refinancing could replace that obligation with a more manageable structure and give the business additional room to operate.
The benefit must be real, however. I don’t want a borrower to focus only on the monthly payment and overlook the total cost of the new loan, its repayment period, fees or any prepayment charges on the existing debt. A longer term can reduce the monthly obligation while increasing the total interest paid over time.
The objective is not to make debt disappear. It is to make the debt sustainable.
An SBA Loan Is an Option, Not an Automatic Answer
It’s true that the U.S. Small Business Administration’s 7(a) program allows eligible borrowers to use loan proceeds to refinance existing business debt, subject to program requirements..
However, this does not mean every obligation can be refinanced. The nature and purpose of the existing debt matter, as do its payment history and the proposed new loan’s benefit. Under the SBA’s current guidelines, refinancing is subject to specific conditions, including requirements concerning eligible debt and improvements in repayment terms.
This is why before asking how much a lender is willing to provide, I would examine the existing obligations, the business’s financial performance, and the reason refinancing is needed. The structure you’re using to repay all loans needs to work for you, not just satisfy a loan request.
Choose a Lender Who Understands the Structure
Debt refinancing is more than simply replacing one payment plan with another. A lender needs to understand the original financing, determine whether it qualifies for refinancing, and evaluate whether the proposed structure genuinely improves the business’s position.
That is one big reason experience matters in SBA lending. The program has detailed requirements, and the right approach depends on the borrower’s circumstances. At Gulf Coast Small Business Lending, our focus is on understanding the financing needs and evaluating how the proposed loan fits the business, rather than assuming that the solution for every borrower will be the same.
A Better Loan Should Leave the Business Stronger
The real measure of successful business debt refinancing is what it accomplishes for the company.
- Does the business have more breathing room?
- Is the repayment schedule better aligned with the cash flow?
- Can the business continue investing in its operations without placing unnecessary pressure on working capital?
- Does the new debt remain manageable if conditions become less favorable?
These are the questions you need to ask and have answers to before making a change. Business debt refinancing can be useful when it addresses a genuine financing problem and creates a more sustainable structure. Before moving forward, you should know both the immediate relief and the long-term cost.
Ultimately, the right financing should support the business’s ability to operate and grow. The goal is not merely to replace old debt with new debt. It is to put the business in a stronger position to meet its obligations and move forward with greater financial flexibility.
If you’d like additional information, please reach out to our team of experienced SBA professionals (link to them here: https://gulfcoastsba.com/our-people/) to discuss your unique needs.
Buying Out Your Business Partner? What Is The Best Option For Financing: SBA or Something Else?
When someone asks me about financing a partner buyout, I usually ask how they arrived at the price. Not because I want to negotiate it for them – I don’t, but because the price tells me what kind of problem we’re trying to solve.
Let’s say you and your partner agree that their share is worth $1 million. That still leaves several questions. Do they want all the money when they leave? How much cash can you put into the purchase? And how much can the business pay each month without turning every slow week into a concern about meeting debt obligations?
These are the questions that will tell us whether an SBA loan makes sense, or whether you should look at a conventional loan, a seller note, or some combination.
With an SBA loan, you can pay your partner now
An SBA 7(a) loan can be used to finance a qualifying purchase of a partner’s interest. The program allows partial changes of ownership and loans of up to $5 million. SBA 7(a) term loans are repaid with monthly principal-and-interest payments from the business’s cash flow.
The obvious advantage is that your partner will receive their payout right at closing instead of you sending them a check every month for the next several years. If what both of you want is a clean separation, this works out perfectly.
Under this scenario, you’re sending the lender a check every month. So as a lender, I’d want to know whether the company can afford it, particularly if your partner had been doing work you’ll now need to hire someone else to do.
As I’ve said before, in an acquisition, the question we ask is: how much debt can it take on? A partner buyout is no different. While we can’t decide what you should pay to buy out your partner, we can tell you how much borrowing the business appears to be able to support.
There are SBA requirements to satisfy as well. The lender must assess repayment ability and apply the change of ownership requirements that fit the transaction, including any applicable equity and liquidity conditions. So, I’d bring a lender into the conversation before the price, the payment terms, and the closing date are all set in stone.
Asking the seller to finance part of the deal
Sometimes the numbers are close, but not close enough. Your partner agrees to a price of $1 million, for example, and the bank is comfortable lending less than you need. If the departing partner is willing to accept part of the price over time, a seller note may help close that gap. Seller financing can be used alongside a business loan in a buyout.
I’d ask both partners to be honest about whether they want that arrangement. Some people have an easy working relationship and are happy to keep a financial connection. Others have spent months trying to untangle one. A seller note is going to keep them in each other’s lives, at least as long as the term of the seller note.
A seller note creates another claim on the business’s cash. Consider what you would owe the lender and the seller each month, then see what remains. Also realize that the lender will need to review the terms of the seller note to confirm that it aligns with all SBA requirements.
What about a regular (conventional) bank loan?
I would absolutely consider this option. If a conventional bank will make the loan on reasonable terms, put its offer next to an SBA proposal. Compare how much money you need at closing and what the payments will be. Those figures affect the business more than the name of the loan program.
We specialize in SBA lending at Gulf Coast Small Business Lending, including business acquisitions and partner buyouts. That doesn’t mean I think an SBA loan wins every comparison. However, after years of comparing options, I find that an SBA loan most often provides the most favorable combination of terms.
Using cash or bringing in an investor
If you can pay with your own cash, you may not need a loan at all. If you go down this path, it is still important to understand how much cash (also known as liquidity) you’ll have left in the bank. Buying your partner’s share could be followed by a new hire, a costly repair, or a stretch of weak sales. Money in the bank gives you options when cash outlays are required or when unexpected things happen.
An investor can provide some of the purchase money without adding a loan payment. Of course, you’ll be sharing ownership again. That may be exactly what you want with the right person; it’s worth thinking about if your reason for the buyout is that you’d rather make decisions alone. Alternative lenders are another possibility when bank financing isn’t suitable, though you need to understand the full repayment obligation before signing.
Our team is always happy to talk about the merits of an SBA loan in your specific situation. To get started, we will need information about what your partner expects to receive, the business cash flow, and what it will cost to operate the business after they leave. Then we can work out whether the loan fits or whether the deal needs a different mix of funding sources. You may just discover that an SBA 7(a) loan is the ideal fit for your situation.
How to Get an SBA Loan to Buy an Existing Business: A Checklist
A buyer called me last month right after signing a letter of intent on a company he’d been chasing for almost a year. He was excited, and understandably so. But he also had no real idea what came next. He knew he needed financing, and he knew the phrase “SBA loan”, but the actual sequence of events between that initial promise of a deal and the closing day was a complete mystery to him.
I’ve spent my entire career looking at the math behind how companies start and grow and over the last few years I’ve noticed the concept of “acquisition entrepreneurship” has taken an unusual upwards trajectory. People are waking up to the fact that buying a profitable, running machine is often a much smarter financial move than enduring the grueling grind of a startup.
On the surface, it sounds like a straightforward paperwork exercise. You find a profitable company, agree on a price, and take the contract to a bank. But in reality, successfully securing the capital is much more than that, and it can become an exhausting endeavor if you’re not aware of the process.
After doing this for decades, I can tell you it boils down to five things. Bankers call these the “Five Cs of Credit”, and honestly, they still hold up perfectly for acquisition financing.
Character: Are You Someone Whom We Can Trust With This
When you apply for an SBA loan to buy an existing business, we’re looking at your personal credit history, your track record with past obligations, and frankly, how straightforward you are during the process. Buyers who hide problems instead of explaining them upfront make us nervous, and for good reason.
“I’d rather hear about a bankruptcy from ten years ago directly from you than find it buried in a credit report,” I tell people often. “How you handle hard conversations tells me a lot about how you’ll run the business.”
Borrowing Capacity: Can The Business Actually Support This Debt
This is the heart of the whole process. Capacity means cash flow, specifically, whether the business’s historical earnings (as well as capital expenditures and growth in working capital) can comfortably cover your new loan payment and still leave room for you to operate and pay yourself.
We analyze three years of tax returns, subtract known capital expenditures, growth in inventory purchases and accounts receivables, and calculate a debt service coverage ratio. If the business generates just barely enough to cover the payment with nothing left over that’s a red flag. An SBA business acquisition loan needs breathing room built in, because real businesses have slow months and unexpected expenses.
Capital: What Are You Actually Putting In
One big thing lenders want to see is that you’re bringing in personal cash equity to the deal, even if you are asking for a government-guaranteed loan (like an SBA 7a loan). Don’t get me wrong, this isn’t about us doubting you. It’s about making sure you, the owner, is personally invested in the business you’re buying.
“When you’ve got your own skin in the game, that’s when you make difficult decisions that you may not make otherwise,” I say to almost every buyer I meet. It’s just human nature.
Collateral: What Backs the Loan If Things Go Wrong
This one’s a given while talking about any loan, but this is where SBA financing to buy a business differs from a conventional bank loan. Traditional lenders often want the purchase to be secured heavily by hard assets, real estate, equipment, or inventory. But with SBA loans you get the choice of borrowing against the business itself, its cash flow, its customer relationships, and its goodwill, rather than requiring a warehouse full of collateral.
This flexibility is an option specifically because of the guarantee lenders receive from the federal government; and this is exactly why acquisition entrepreneurs gravitate toward this type of financing. You don’t need to be buying a business with hard assets to secure funding.
Conditions: Does the Deal Structure Make Sense
The last piece is the deal itself. What’s the purchase price relative to what the business earns? Is the seller staying involved for a transition period? Is there a seller note being carried to bridge any gap between price, cash injection and available bank debt?
“You can be a great buyer, but if your deal is poorly structured deal, you may not get approved,” I remind people. “The structure has to hold up on its own.”
Bringing It All Together
If you want to know how to get an SBA loan to buy a business, understand that we’re really just evaluating you against these five things: your character, your capacity to service the debt, the capital you’re bringing, what backs the loan, and whether the overall deal makes sense. Strengthen any weak spots before you apply, and the process moves a lot faster and has a greater likelihood of approval.
At Gulf Coast Small Business Lending, this is the lens we use on every acquisition deal that comes across our desk. If you’re thinking about buying a business and want an honest read on where you stand against these five factors, let’s talk. You can connect with our team of experienced SBA professionals here: https://gulfcoastsba.com/our-people/.
It Takes a Village
Small and medium-sized businesses (SMBs) represent the engine of the US economy, driving innovation, creating jobs, and powering local communities. Yet, when it comes to securing the capital needed to grow, SMB owners often run into a familiar wall: long application processes, rigid credit requirements, and weeks of waiting for a decision.
In recent years, the story was framed as a battle: Traditional Banks vs. Disruptive Fintechs. If you listen to the hype, the future of business lending belongs entirely to algorithms. Write a quick prompt, plug in a bank feed, and let an automated credit model decide the fate of your small business in seconds.
Not so fast. Fintechs, regretfully, are almost always associated with extraordinary interest rates and fees and in some cases, outright scammy business practices.
Today, a smarter narrative is taking shape. Rather than competing for market share, we, traditional banks, and fintech innovators are joining forces to solve the SMB capital crunch.
When we ourselves looked at fintech, and specifically automated underwriting, we saw plenty of cracks – impersonal decisions, failure to understand nuanced business models, and risk pricing that leads to eye-watering interest rates. On the flip side, we aren’t innocent either; our manual processes and paper-heavy workflows can sometimes make getting a simple term loan or a line of credit feel like moving mountains.
The solution to the SMB capital crunch isn’t replacing human bankers with bots. It’s melding the digital efficiency of fintech with the sound risk management and low-cost capital of traditional institutions.
To bridge the gap, we have to be honest about where both models fall short:
Pure Fintech Lenders: They got the speed right, but often at the expense of the borrower. Relying heavily on algorithmic risk scoring forces alternative lenders to price in uncertainty. The result? APRs that can drain an SMB’s cash flow rather than grow it.
Traditional Banks: We have the lowest cost of capital and deep community roots, but our front-end customer experience can be slow. Asking an entrepreneur to gather three years of tax returns, print PDF bank statements, and wait four weeks for a decision simply doesn’t work for modern business timelines.
Melding these two worlds isn’t about letting a computer make the final credit call. It’s about leveraging technology to clear out administrative friction so human underwriters can make better, faster decisions. Here is a summary of what we are working on:
- Frictionless Data Gathering: Fintech tools excel at API integration. Instead of making borrowers hunt down paperwork, technology can instantly aggregate accounting data, tax history, and bank statements in minutes.
- Speeding Up the Desk, Not Replacing the Underwriter: Once the data is ingested, financial technology packages it cleanly for human review. A banker can review real-time cash flow and context within hours—not weeks.
- Affordable Rates and Low Fees with Modern Speed: Because we retain control over risk parameters and use our low-cost deposit base to fund loans, SMBs get reasonable bank interest rates without the agonizing bank wait times.
The Bottom Line: Small business owners don’t want a machine deciding if their life’s work is creditworthy. But they also can’t afford to wait months while opportunities pass them by. By adopting technology and streamline our human processes, rather than an underwriting decision-maker, we keep the relationship at the center of commercial lending here at Gulf Coast Small Business Lending while giving business owners the fast, transparent access to capital you actually need.
The title of this post isn’t original. I am going to be sitting on a panel with the same name in December, FTT’s Fintech Conference in Austin. See you there.
If you run a small business or work in commercial lending, where do you feel the biggest friction exists today—the speed of the process or the relationship itself? Let’s discuss in the comments. And as always, if you need capital, give us a shout.
Contact information for our team is here: https://gulfcoastsba.com/our-people/
A New Era at the Fed
My old econ professor, Jeremy Siegal is a known “Fed Watcher.” I quickly formed an opinion on Kevin Warsh after watching the new Federal Reserve Chairman’s debut FOMC meeting in June and waited a couple of days before listening to Siegal’s analysis; our views are identical.
Spoiler alert: I am very happy about Warsh and believe he is the right person to guide our increasingly complex economy. He had me with the first six words he uttered: “The Committee will deliver price stability.”
The meeting enforced the feeling of a fresh start at the central bank. Taking the wheel at the Fed is one of the toughest jobs in the world, especially succeeding Jerome Powell (I am a fan, btw). Warsh’s highly anticipated first public meeting in June proved he is exactly the steady, forward-thinking leader the economy needs right now.
First, the tone: His communication style during the post-FOMC meeting press conference is direct and concise. I contrast it with the typical ultra-cryptic “Fed-speak.” Warsh came across as clear, decisive, and market-savvy.
Second, the action: While it is still early to judge, I very much liked his balance of handling inflation concerns while signaling a pragmatic, pro-growth approach to interest rates. Warsh’s background, having been the youngest Fed Governor during the 2008 financial crisis, gives him the unique, practical market experience required for this moment.
Navigating the Waves
Warsh is facing a challenge not seen since the early days of Paul Volcker’s tenure at the Fed, perhaps even more unusual: Powell keeping a seat on the board, political pressures, the ascendance of China, and very stubborn inflation numbers. I am confident that his decisive debut actions quieted the skeptics and showed he can maintain the Fed’s critical institutional independence while still prioritizing economic stability. Warsh’s first outing was a major win for both Wall Street and Main Street, the two constituents that are most important to our borrowers and our business.
If you haven’t watched June’s FOMC presentation, view it here: https://www.youtube.com/watch?v=7pIFqmMCxVc. This broadcast captures the exact tone and public actions that are defining the start of his tenure.
The Impact on our World
Stability is the key economic underpinning to our business. Above all, when we look at new lending opportunities, we judge the quality and stability of the business’ free cash flow. Full employment, price stability, and lower interest rates are the three macro-economic factors that figure heavily into every loan we underwrite. And the new leadership at the central bank are laser-focused on these three factors.
As always, please consider Gulf Coast Small Business Lending when you start thinking about how to grow or acquire a business. We are on standby to listen to your plans and hopefully help you finance your dream. You can find a listing of our experienced business development officers along with their contact information on our website here: https://gulfcoastsba.com/our-people/. We are actively supporting entrepreneurs nationwide as SBA Preferred Lenders.
Dear AI:
I hope this letter finds you well.
We need to talk. It looks like you are planning to stick around, and I would like to provide a list of wishes that are necessary for us to get along, even thrive together.
As a lender, specifically an SBA lender, I’d like you to:
Help potential borrowers and referral sources find us. There are over 4,000 of us, each with our own quirks, likes and dislikes, underwriting standards, regulatory regimes, specializations, loan terms, and a hundred more unique features. The same with borrowers: each is an individual with her or his needs, experience and financial wherewithal. The name of the game is “capital access.” We have capital we wish to invest, and the business owner has uses for capital. It’s as simple as learning about us (lender and borrower) and matching us up.
Improve our productivity. Doing SBA loans is hard work and some of it is tedious and prone to errors. We can’t hire and train fast enough to keep up with the demand and are hopeful that you can help us. We are already using you for this and looking for added innovation to make it even better.
Give me insight. The data is there, lots of it, but it’s sometimes difficult to separate signal from noise and distill it to important trends and insights. What part of the country has the most need for our capital? Industries? What makes a good SBA loan? A bad loan? What industries are deserving but underserved. To be clear, I will never ask you to make decisions for me, but I’d love you to give me insights that allow me to make the right decisions. You’re supposed to be good at it, certainly fast, so let’s get to work.
Earn my trust. Let’s be honest; I don’t trust you very much. I question your answers, especially when you tell me how smart I am (I am not, and I am self-aware). And those hallucinations?!? C’mon, get your act together. And are you sure the proprietary data I input isn’t used for model training or even worse, shared with others?
Don’t be an asshole. Scams, fake news, water and energy consumption, noisy data-centers, opaque pricing, enabling bad actors, intellectual property theft, the list goes on. You’re important, you’re useful (not the Tik Tok part); now let’s work on your ethics.
This is a fairly comprehensive list and I understand it might take a little bit of time to implement every single suggestion. In the meantime, I and my team of experienced SBA 7(a) lending professionals remain available to talk about deals. In fact, that will never change. You can’t get rid of the human element although you can certainly enhance the overall process. Anyone reading this who needs or wishes to interact with a live human, you can find a listing of our experienced SBA professionals here: https://gulfcoastsba.com/our-people/. We look forward to being of assistance.
Foremost, Reliability
I was working on another blog post one recent Saturday morning, writing about the food industry, farm-to-table, how much I love it and how much I’d like to make more SBA loans to its participants. But then a good friend called for some advice on buying a camera. Those of you who know me know how passionate (and opinionated) I am about the craft. I’ve been shooting seriously for a long time, ever since my parents gave me my first good camera (details at the end of this essay, for you fellow photographers). Because of this conversation, my original blog concept has been bumped to June so watch for it in a few weeks.
After I dispensed the advice (Nikon Z6iii), I spent another hour or two writing down all the cameras I owned since that first one, those I loved and those I hated, and tried to find the common thread. It wasn’t the quality of the images I made, the cost, the features or the prestige. It came down to one attribute: reliability. It had to work in all conditions, take abuse, and never fail.
Later that day, after reflecting on it further, I realized that reliability is a core factor in how I evaluate things in both my personal and professional life. That led me to the topic of this blog: what does it mean to be a reliable lender? Here are the qualities I identified. I recommend using this checklist when evaluating your next loan.
- Financial Stability: This is the absolute baseline. A reliable lender must be a safe fortress. I am seeing way too many cases where banks over-extend themselves when issuing term-sheets, only to back out of the deals when it’s time to fund the loans or changing the terms in the last minute (e.g. require higher equity injection, raising rates, etc.) because of their own financial condition.
- Regulatory Credibility: As critical as financial stability is the lender’s standing with the regulatory bodies. To protect the public in general and borrowers in particular, bank-owned SBA lenders like Gulf Coast Small Business Lending are regulated by multiple bodies: state bank regulators, FDIC, and the US SBA itself. We run the cleanest shop in the business, and we urge borrowers to scrutinize their potential funding sources. Avoid non-regulated lenders.
- Absolute Transparency: The best lenders don’t rely on fine print or confusing jargon to make a living. Our loan terms are written in plain English and include all costs, rates, fees and conditions to closing, and when we issue a term sheet, we stick to it. No bait and switch.
- Ethical Underpinning: Believe it or not, there are “bad actors” in our industry. We strive to price our loans fairly and structure them responsibly. We partner with borrowers for many years, as many as 25 in some instances, and mutual trust is paramount. We take this seriously and, as a result, provide full transparency upfront. In short, we do what we say we will do. Finding a way to say YES isn’t just a tagline, it is a way of life and our approach to every opportunity. If there is a way to say YES, we’ll do it.
- Operational Excellence: From the very first contact all the way to loan servicing and final payoff, a lender must have streamlined processes and up-to-date technology. Core to our operating philosophy are well-trained, experienced industry professionals who make every phase of the relationship fast and efficient.
Considering a loan? Give us a try by contacting any of our SBA lending professionals (or me) to get the ball rolling. You’ll find a listing of them here: https://gulfcoastsba.com/our-people/. We are finding a way to say YES!
Back to photography. My first serious camera, a Bar Mitzva gift from my parents was a Canon FTb. I used it for about ten years and while I don’t shoot film anymore, the camera, nearly fifty years old, is as good as new. Subsequently, I owned other stellar cameras such as the Nikon FM2, Nikon F5, Nikon D4 and for the past four years, Nikon Z9. Reach out for camera advice…