Thanks, Kristy. So, Kristy, you and I chatted. I know that your particular unit of B of A – obviously a large institution; you have various things going on there. But your particular group is taking a new, fresh look at franchise lending. Help me understand how you’re getting into it, and how do you expect to start sourcing those franchise borrowers?
Yep, absolutely. Thanks, Mike. Yeah, within the Bank of America I actually work within a division – it’s within our small business banking area, and we primarily focus on the healthcare. So probably over the past four to six months we’ve been looking at entering the franchise space and really working very closely with members of the IFA, a lot of the people that are on the phone call today, to try to understand the franchise market, trying to understand some of the challenges that have happened over the past several years or the past couple years with franchise lending to really try to insert ourselves within the space. Again, we work within the healthcare space today, so we’re looking to enter the healthcare space ‘cause we have the experience and we’re looking at the home healthcare, some of the pet franchise sectors, and really trying to take a deep dive into the brands themselves. And that’s working with Darrell looking at the bank credit reports and then speaking directly with the franchisors to try to understand what kind of support they give their franchisees so we have a better understanding of the brand – first underwriting the brand, and then we’d be underwriting the franchisee. So that’s our position with entering this space, again really working through the IFA, getting in contact with experts out there in the franchise market. And then also we’re driving an initiative through the Consumer Bankers Association really just to expand the capital that’s out there today for franchises.
Great. I appreciate that, Kristy, and we’re going get a chance to learn more about that bank credit report and we’re going hear from Darrell in just a moment. Before we leave that topic I just want to stay on the idea of sourcing deals, and Bank of America – pretty large. Kevin, you’re from a bank that’s pretty small. How do you guys look to market within the franchise community and find franchise borrowers?
You know, I always have been looking to my traditional sources – you know, commercial real estate brokers, mortgage brokers, business brokers. But, you know, I think I can honestly say probably the most volume that I’m getting right now from franchises is due to new products like the BoeFly platform. I’ve been very successful, as have others here, originating and closing deals that otherwise we never would have been introduced to. So it’s been pretty value, you know, and it’s an alternative way to do business, and it’s proven to me to be a great way to match people up that need to be put together.
Good. And does your branch – how many branches do you guys have, Kevin? Do you have a ballpark on that, and does that deliver for you on the franchise side?
To a certain extent. You know, we’re relatively small from a branch standpoint – you know, we’re located in south Georgia and north Florida – although from a lending standpoint we are able to lend all over the state of Florida and all over Georgia. So there is some branch activity, but we really – my group is made up for the most part of ex-non-bank lenders, and we run this shop very much like a non-bank in terms of the _______ being very independent and, you know, all of us coming in with our proven and historic referral sources, et cetera. Now, of course, the landscape has changed so much that, you know, the marketing and trying to add new folks to the referral list is always ongoing.
Good, I appreciate that. And Doug, let’s shift to you on that. You know, as a finance company that’s focused on multi-unit franchisees, how do you get the word out there? How do you find franchisees?
Well, we’ve been doing some trade journal advertising. We’ve been attending some of the larger events. We are active with BoeFly, which for us is good because it’s an inexpensive way for us to access the borrowers, and sometimes we’re able to pass along some of the savings to the borrowers as a result. But we also look at things such as broker and consultant networks. We also look to other banks. Since we do not have any deposit requirements for our borrowers we are actually a good fit for a bank that can’t accommodate the borrower’s loan request and doesn’t want to see it go to someone that’s going need the deposit relationship as well. So it’s really from a variety of sources. Of course since we are working with multi-unit operators, oftentimes through word of mouth from them or repeat business from them, and of course franchisors themselves.