Lending to Searchers - the US experience

In this episode of "The Next Step," I'm talking to Heather Endresen. She's the director of Search Funds Lending at Live Oak Bank in California, United States.

I found it really interesting chatting with Heather because she has actively sought out to build a division within the bank she represents that focuses purely on search (something I hope to see more of in the Australian market soon!). I think that is really inspiring and encouraging for everyone in the search community because it means that there is enough interest, from a banking perspective, in lending to these kinds of businesses and these kinds of deals.

In this episode, Heather talks through what is it about search that is such a positive thing from a banking perspective. There are a lot of great insights in her reflection and reasoning.

Quite often, deals and businesses of the size searchers are looking to acquire can struggle to get lending that's very flexible and innovative. Particularly in Australia, that kind of debt has to be property backed. Commonly, they are highly secured loans with director's guarantees. Yet contrary to these loaning practices in Australia, what Heather is finding is that the search-fund model and the elements that it brings provide some real benefits from a banking point of view, not only in terms of the borrower's credit-worthiness but also of the efficiency of the lend.

I had a great time chatting to Heather and I hope you enjoy this episode as we dig into the banking and lending side of the search model process.

Show notes:

·     01:40 –Heather talks about her how she came across and embraced the search model and its community 

·     04:19 –Heather talks about how the SBA (Small Business Administration) helps the search community in the U.S.

·     07:42 – Pete and Heather talk about the capabilities and coachability of the searcher have an impact on his/her success

·     12:05- Pete and Heather talk about the structure for bigger banks to lend to smaller businesses and its ability to invest on the search model

·     17:10-Pete and Heather talk about the process of communication after having debt on a bank, what is in the U.S. market and how it is different from the Australian market and the future of Banks involvement search fund businesses? 

Learn more about Search Fund and entrepreneurship through acquisition and connect with Pete and Heather:

Pete Seligman: LinkedIn

Heather Endresen: LinkedIn