4/01/26
By Sherry Waner, Chief Development Officer, First Southwest Bank
It is a scenario familiar to every commercial lender: a promising entrepreneur walks through the door, but the deal quickly hits a wall. Perhaps it is a startup with limited operating history, a collateral shortfall, an inadequate down payment, or a loan-to-value ratio past the comfort zone. When we are forced to turn these borrowers away, the ripple effects are felt far beyond our balance sheets. We lose the opportunity to spark job creation, and more importantly, we risk souring a customer relationship before it even has the chance to mature.
Navigating the Complexity of Gap Funding
Many lenders are aware that risk mitigating enhancements exist - loan guarantees, down payment assistance, credit reserve programs, and specialized grants. These tools are designed specifically to mitigate risk and bridge the gap for traditional banks.
However, the barrier to entry is high. The sheer complexity, specialized reporting requirements, and administrative overhead of these programs mean that many community banks simply do not have the resources to utilize them effectively.
A Case Study in Creative Structuring
A few years ago, our institution was approached regarding a business acquisition in Southern Colorado. A military veteran, who had risen through the ranks as a sales representative, sought to purchase a local company, along with two other employees, that had been a staple employer in the region for over 30 years. It was a strong business with a proven legacy, but the buyers only had a 5% down payment. Under traditional underwriting, the financing was a non-starter.
By leveraging risk-mitigating funding sources, we were able to structure a creative solution: 95% financing with a 75% guarantee on a nearly $2.5 million loan request. The deal closed; the veteran and two other employees became owners, and a vital local employer remained intact.
Saying “Yes” More Often
This success story became a catalyst for our organization. We realized that lenders across the Centennial State and beyond were facing the same hurdles. To solve this, we developed HelloBello®.
HelloBello® is a technology platform built by bankers, for bankers. Using proprietary algorithms and logic, the platform identifies risk-mitigating capital and credit enhancements tailored to specific community projects and entrepreneurs who might otherwise fall through the cracks.
In today’s competitive landscape, efficiency is everything. This technology simplifies the "alphabet soup" of complex lending programs, allowing community banks to deploy capital more effectively. By integrating these tools, we aren't just managing risk - we are amplifying our impact, securing our margins, and ensuring that the next generation of Colorado entrepreneurs has a seat at the table.
If you want to learn more about how working with First Southwest Bank & HelloBello® can help your lenders say yes more often and expand access to capital in your communities, contact sherry.waner@fswb.com.