Ready to Take Your Agency to the Next Level?

Ready to Take Your Agency to the Next Level?

Article By: Kimberly Bunce, SFB Relationship Manager

When it's time to grow your agency - whether through an acquisition or partner buyout - you want a lender that will meet your needs. But not every bank is equipped to finance the purchase of an insurance agency simply because they don't understand the nuances of the industry. Your local community bank may require government-backed funding, such as a Small Business Administration (SBA) loan, which might require more time and fees that could make your project more costly.

At Security Financial Bank (SFB), we're different. We understand that excellent management leads to business stability and customer retention. We appreciate the value you have created in your agency's book of business, and we recognize it as a valuable asset, which gives you more buying and financing power.

But, it wasn't always like that. Initially, our lenders and credit analysts were uninformed about what comprised the financial viability of an insurance agency. So, we decided to get educated.

First, we needed to have a basic understanding of the industry. A CPA firm with industry experts met with our lending and credit teams over several sessions to educate us on how agencies are valued and how to analyze and dissect an agency's "book of business." This was an invaluable exercise.

Subsequently, we had the opportunity to educate our Board of Directors so all areas of the bank had a strong understanding of what makes an insurance agency prosper. And eventually, we even created a separate section in our loan policy to address this significant niche.

Over the years, we have learned that for a bank to partner in lending with an insurance agency, it requires much more than turning on a switch to enter this lending arena. There is work to do and knowledge to acquire.  At SFB, our commitment began with education and has taken years to refine by doing transactions that make sense.

Today, SFB has experience in financing both large and small acquisitions, partner buyouts, agency mergers, and debt refinancing. We work with our clients throughout the Midwest to determine the best structure of financing. We also provide both producer and technology loans to help your agency grow along with real estate loans and lines of credit. 

If you would like to learn more about how we can use our industry expertise to help you with your next project, please contact us. We look forward to partnering with you.

Kimberly Bunce, a relationship manager at SFB, brings a fresh perspective to SFB's Insurance Agency Lending Team. During her tenure at the bank, she has been involved with a complicated, ever-changing partner buyout that morphed into a partner buydown over a five-year period. Kimberly's experience as a CPA and her attention to detail helped the transaction run smoothly.  Kimberly has since been involved in additional projects for the same owners as well as acting as a key advisor for other professionals. Security Financial Bank · Member FDIC