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Common misconceptions about SBA loans:
📌 Misconception: You always have to pledge a lien on your house
➡️ Reality: The lien is only required if you have 25% or more equity in your house. 1/x
#sba #smb #acquisitions #entrepreneurs #independentsponsors
📌 Misconception: You always have to pledge a lien on your house
➡️ Reality: The lien is only required if you have 25% or more equity in your house. 1/x
#sba #smb #acquisitions #entrepreneurs #independentsponsors
*Continued*
📌Misconception: When you're buying a business, your 10% down payment needs to be all cash
➡️ Reality: You have the ability to do 5% cash (based on the total uses of funds) if the seller holds 5% on Full Standby as a seller note. 2/x
📌Misconception: When you're buying a business, your 10% down payment needs to be all cash
➡️ Reality: You have the ability to do 5% cash (based on the total uses of funds) if the seller holds 5% on Full Standby as a seller note. 2/x
📌 Misconception: Anyone in the ownership group has to personally guaranty the SBA loan
➡️ Reality: SBA's requirement is that any 20% or more owner of the business has to personally guaranty. 3/x
➡️ Reality: SBA's requirement is that any 20% or more owner of the business has to personally guaranty. 3/x
One of the most popular phrases that you will see on SMB Twitter is the "Silver Tsunami," alluding to the massive wave of retiring baby boomers selling their businesses over the coming years.
In this thread, I am going to cover how to capitalize on the Silver Tsunami 🌊 as a prospective entrepreneur or searcher that is looking to buy a business within the coming years.
1 - Attend the ETA Conferences
➡️ There are 3 large annual ETA conferences - Harvard, Chicago Booth / Kellogg, and the Southeastern ETA conference (UVA, Duke & UNC)
➡️ Each of these conferences is filled with searchers, service providers, investors, and lenders
➡️ There are 3 large annual ETA conferences - Harvard, Chicago Booth / Kellogg, and the Southeastern ETA conference (UVA, Duke & UNC)
➡️ Each of these conferences is filled with searchers, service providers, investors, and lenders
Business acquisitions financed through SBA loans have very specific requirements that need to be followed. In this thread, I will dive into a few such requirements🧵 👇
#sba #smb #acquisitions #entrepreneurs #independentsponsors
#sba #smb #acquisitions #entrepreneurs #independentsponsors
1 - Complete Change of Ownership:
➡️ As the SBA's guidelines currently stand, if you are buying a business as an external buyer (someone that doesn't currently own equity in one), you are required to completely buyout the seller(s). No exceptions.
➡️ As the SBA's guidelines currently stand, if you are buying a business as an external buyer (someone that doesn't currently own equity in one), you are required to completely buyout the seller(s). No exceptions.
2 - Consulting Period for the Seller(s):
➡️ SBA guidelines currently enable a seller to stay on for up to 12 months following the date of the closing of a business acquisition. The terms of the consulting arrangement must be approved by your lender & lender's legal counsel.
➡️ SBA guidelines currently enable a seller to stay on for up to 12 months following the date of the closing of a business acquisition. The terms of the consulting arrangement must be approved by your lender & lender's legal counsel.
SMB Searcher Meet & Greet Calls - 30 minutes ($20)
➡️ Discuss high level factors that are important in the SBA loan approval decision making process
➡️ Walk through a waterfall acquisition model and discuss how deals are structured with common & preferred equity. 2/x
➡️ Discuss high level factors that are important in the SBA loan approval decision making process
➡️ Walk through a waterfall acquisition model and discuss how deals are structured with common & preferred equity. 2/x
➡️ Walk through how debt service coverage works and how to think about it with evaluating deals
➡️ Cover how to think about sources and uses with SMB acquisitions (what is SBA allowable, what is typical in acquisition structures). 2/x
➡️ Cover how to think about sources and uses with SMB acquisitions (what is SBA allowable, what is typical in acquisition structures). 2/x
➡️ Discuss the process of working with @PIONEERCAPADV for your SMB acquisition financing
➡️ Discuss when a bank is required to take a lien on your house.
➡️ Cover the concept of a full standby seller note and when it makes sense for your deal. 3/x
➡️ Discuss when a bank is required to take a lien on your house.
➡️ Cover the concept of a full standby seller note and when it makes sense for your deal. 3/x
What Is a Personal Guaranty and When Is It Required with an SBA Loan? A 🧵 👇
#sba #smb #acquisitions #entrepreneurs #independentsponsors
#sba #smb #acquisitions #entrepreneurs #independentsponsors
1 - When SBA Requires the Personal Guaranty
➡️ Any 20% or more owner of an applicant business is required by SBA to personally guaranty an SBA loan. No exceptions. 1/x
➡️ Any 20% or more owner of an applicant business is required by SBA to personally guaranty an SBA loan. No exceptions. 1/x
2 - What Does a Personal Guaranty Mean?
➡️ All of your personal assets are along for the ride on your deal. If your deal goes sideways, the bank essentially can go after everything that you own. 2/x
➡️ All of your personal assets are along for the ride on your deal. If your deal goes sideways, the bank essentially can go after everything that you own. 2/x
In this thread, I am going to explain how you can take advantage of the 'Silver Tsunami' in the SMB acquisition space by using a commercial loan broker for the financing process of your SMB acquisition 🧵
#sba #smb #acquisitions #entrepreneurs #independentsponsors
#sba #smb #acquisitions #entrepreneurs #independentsponsors
1 - Historical Backdrop
➡️ Trillions of dollars of businesses will change hands within the coming decades. Many of you have read threads on this topic from @SMB_Attorney @girdley @Codie_Sanchez & others
➡️ Trillions of dollars of businesses will change hands within the coming decades. Many of you have read threads on this topic from @SMB_Attorney @girdley @Codie_Sanchez & others
2 - Financing the Acquisition
➡️ One of the factors that goes into the process of buying a business is acquisition financing. You have 2 options with this: DIY approach or working with a commercial loan broker.
➡️ One of the factors that goes into the process of buying a business is acquisition financing. You have 2 options with this: DIY approach or working with a commercial loan broker.
