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BancAlliance Funds $32.5MM Member-Referred Loan to Software Developer

February 19, 2014, 07:32 AM
Filed Under: Industry News

BancAlliance announced that its network of over 150 member banks in 37 states originated a $32.5 million loan to a borrower referred to the network by one of its member banks. The referring member, West Gate Bank, retained control of its relationship with a long-time customer by tapping the BancAlliance network to underwrite and fund a loan that exceeded West Gate’s lending capacity.

“West Gate Bank has enjoyed a long and successful relationship with a growing local security software developer, but when the company asked for a loan that was too large for our balance sheet, we feared we might lose this relationship to a larger bank,” said West Gate Senior Vice President John F. Arrigo. “We’re pleased to work with a network of banks that we know and trust and to be part of a system that reduces the competitive issues and workout concerns that we’ve experienced with past participations.”  

“Today’s announcement is truly a milestone for us. BancAlliance was in part designed to allow members to retain valuable clients with growing credit needs by fully syndicating those loans across BancAlliance member banks,” said BancAlliance President Lori Bettinger. “This loan produced a win-win situation for all involved: the referring bank was able to retain a customer they might otherwise have lost and generated significant fee income from the referral, while BancAlliance members benefitted from an opportunity to participate in a high-quality commercial loan.”

The $32.5 Million loan was underwritten and agented by an SEC-registered investment adviser subsidiary of Alliance Partners LLC that serves as the adviser to BancAlliance and its members. BancAlliance members purchased substantially all of the loan, with Alliance Partners LLC retaining a nominal portion to align interest with its clients.

Founded in 2011 with the support of 25 founding member banks, BancAlliance is a network of community and regional banks that work together to evaluate and fund commercial and specialty loans that otherwise would be too large for an individual member’s balance sheet. Loans are typically made to American companies with annual revenues of $25 Million to $300 Million.

“Community banks across the country lose business to larger competitors when borrowers request loans too large for a single community bank to provide,” said Bettinger. “Our goal is to help local and regional banks compete with America’s largest banks on their own turf, so that smaller banks can continue providing vital services to their communities.”

BancAlliance members have access to loans in the corporate finance, healthcare real estate and equipment finance markets. The network’s underwriting and credit policies are established by the BancAlliance Board of Directors, comprising representatives from member banks.

The BancAlliance network is a shared corporate and specialty lending platform that helps its community bank members source, underwrite and manage loan and lease opportunities. In addition, members have access to ongoing monitoring of all loans and leases sourced through the network. The network’s goal is to enable its members, the banks that direct its activities, to prudently diversify into high-quality corporate and specialty loans and leases in a manner consistent with the highest commercial and regulatory standards – without changing the nature or mission of the traditional community bank. BancAlliance has over 150 member banks located in 37 states.

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