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Lender Relations Specialists help keep a funeral home deal alive
The Plattsmouth Chamber of Commerce organized a ribbon-cutting ceremony Sept. 24, 2010, for the Brian P. Harvey Funeral Home’s location on Main Street. Lender relations specialists from the Nebraska District Office worked with the lender at Murray State Bank to solve some tough problems and ensure the business got SBA-backed financing, and that families in rural Nebraska would continue to receive quality care and attention.
They had worked their way up from employees to potential owners of the business, but before they could take the keys to the front door, they’d need help from a Murray, Neb., banker and a couple of lender relations specialists at the SBA’s Nebraska District Office.
The Fusselman-Wymore Funeral Home, an institution in the eastern part of the Cornhusker State for the past 50 years, offered full bereavement services, including grief support, to five rural Nebraska towns in two counties. The employees, Doug Allen and Brian Harvey, along with their wives, Linda and Christina, respectively, saw an opportunity to purchase the corporation for $1.35 million, but there would be some obstacles in their way.
Russ Henning, a lender with Murray State Bank in Murray, said the current owners of Fusselman-Wymore had problems documenting their cash flow, holding up the sale going forward. Then there were the unconventional problems: Somebody was living in the residence of a shared building at one funeral home location. Normally, proceeds from an SBA loan can’t go to any part of a residence; in small-town Nebraska, though, the funeral director has to live in the funeral home to be on call 24/7. In another location in Syracuse, the business owner lived in house right next to funeral home. “We had to confront the issue that none of the money could go to the house,” Henning said, “so we’re turning the house into office space, transforming it into a place where you can meet with family, display an assortment of caskets and other merchandise.”
Worse, the entire deal was under a cloud: All the Fusselman-Wymore properties were in foreclosure.
“We’d done very few SBA loans,” Henning said. “We’d done a couple low-doc things, but this was very big.” So he turned to Deborah Wilson and Suzanne Stearman at the Nebraska District Office for help.
Starting in late December 2009, Stearman worked with Henning over the phone, outlining the eligibility and basic parameters of a standard 7(a) loan for a possible funeral home start-up. Over the next couple of months, Stearman answered several questions from the banker involving appraisals and valuations of the business, including how properly to value the goodwill of a funeral home business that’s served small-town families for half a century. She even helped the borrowers decide that buying the existing business was a better move than starting up a new one.
In March 2010, Stearman drove south from Omaha to Murray to meet in person with Henning to offer help in completing the painstaking work of the loan application.
Wilson offered a complete review of the application package with Stearman during a 2-1/2-hour marathon session late one Thursday afternoon, and caught some discrepancies with financial statements.
“There was one form where you have to do a balance sheet before and after the sale,” Henning explained. Wilson “basically did that for me, which was really helpful.” She also worked with Henning to find an acceptable solution for the processing center to permit the funeral director to continue residing in that funeral home building. After a few phone calls and e-mails later, the deal was submitted and approved by the processing center March 26, 2010 – on the first try.
The foreclosure process had slapped on a deadline, but being in a small town, the banker said, did help: at least all parties to the foreclosure “are on board, doing everything in a rapid fashion to get everything done in time.”
The mountains Henning climbed – with the help of his SBA Nebraska District Office guides – resulted in a payoff for Allen and Harvey with a $1.35 million 7(a) loan under Recovery Act provisions. And the tradition of serving rural Nebraska families in their time of greatest need with the greatest care should continue.