Bell Bank Meets Growing Need with Fund Financing Options
Subscription lines of credit weren’t a lending specialty offered by Bell Bank – until a customer needed one.
Also known as fund financing, equity bridge financing or a capital call facility, a subscription line of credit is basically a short-term loan taken out by a private fund and secured against money committed by investors.
Because of the specialized nature of fund financing, national banks that offer it typically do not consider deals with lines of credit less than $50 million or even $100 million. And then clients often end up having to pay non-use fees.
That didn’t suit what our client was seeking, putting them in a bind. They were raising a new fund and needed financing. If they opted for fund financing at a large national bank, they would have ended up paying a lot of fees.
As a regional bank that’s known for creative problem solving, Bell looked into how it could offer subscription line of credit financing on a smaller scale and then worked to get it done.
“As a business model, it made a lot of sense,” explains Humberto Gutierrez, Bell Bank senior vice president and commercial banker. “Regionally very few others are doing this, but we felt it was worth exploring.”
With more than 20 years’ experience in banking, and having worked as a CFO of locally owned companies, Humberto has a deep understanding of the daily challenges of entrepreneurship. He also knows that businesses and funds are as unique as the people who run them, and they sometimes need personalized financial solutions – not one-size-fits-all thinking. Able to offer constructive advice and innovative ideas for financing deals, one of Humberto’s areas of expertise is financing funds and private equity firms through subscription lines of credit.
“My ultimate goal is to help businesses grow their revenue and bottom line through proper banking services,” Humberto remarks. “Bell is the right size to be able to step in and offer financing for funds that don’t need a $100 million credit line.”
As word spreads that Bell offers smaller subscription lines of credit, more funds are turning to Bell and Humberto for help – and the opportunity to better manage both investor relations and cash flow.
“We’re an independently owned bank with Midwestern values – and that resonates with people,” Humberto affirms.
Bell offers subscription line of credit financing to funds in the upper Midwest, or beyond to funds connected with Bell customers.