Discover and read the best of Twitter Threads about #sba
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@Coinbase's bank is being sued for predatory lending in a large class action lawsuit filed ~8 weeks ago.
It gets worse though... Because @CrossRiverBank is also starting to have to sue people for loans that are going bad. Financials only allow 1.6% loss. $COIN
ruh roh
@Coinbase's bank is being sued for predatory lending in a large class action lawsuit filed ~8 weeks ago.
It gets worse though... Because @CrossRiverBank is also starting to have to sue people for loans that are going bad. Financials only allow 1.6% loss. $COIN
ruh roh
@coinbase @crossriverbank 🧵2/Ω Kinda f'ed up other thread so I'm gonna copy these over here. tl;dr #seemsbad for @CrossRiverBank and $COIN.
Specific allegations about how @CrossRiverBank (@Coinbase's bank! $COIN) broke the law and allegedly defrauded a bunch of people w/predatory "debt relief" lending along with #NewCreditAmerica
Here's @CrossRiverBank's details over at #FDIC. Various addresses, FDIC ID numbers, charter info, etc. in case anyone's looking to dig around.
Note that for their first 5 years they were rated "Needs to improve" as a bank.
#lolbank
banks.data.fdic.gov/bankfind-suite…
Note that for their first 5 years they were rated "Needs to improve" as a bank.
#lolbank
banks.data.fdic.gov/bankfind-suite…
@crossriverbank 🧵 Who else didn't know that @CrossRiverBank changed its name from #FirstFinancialBank in 2008?
state.nj.us/dobi/bnk_depos…
state.nj.us/dobi/bnk_depos…
🧵 @CrossRiverBank is technically owned by #CRBGroup (seems like it's not the same as @CRBgrp?), a holding company in Fort Lee, NJ. Apparently #JoannaAlbertine is the CFO.
Here's their annual filings in NJ: ffiec.gov/npw/Institutio…
Here's their annual filings in NJ: ffiec.gov/npw/Institutio…
The ETA space has never had this much action.
I will give a few anecdotal examples from the last several weeks:
➡️ 2 friends contemplating an acquisition in 2023 fly out from California to Dallas for the SMB Dallas event hosted by @SMB_Attorney & others. 1/x
I will give a few anecdotal examples from the last several weeks:
➡️ 2 friends contemplating an acquisition in 2023 fly out from California to Dallas for the SMB Dallas event hosted by @SMB_Attorney & others. 1/x
➡️ On a weekly basis, I am receiving DMs on Twitter from undergraduates at major U.S. universities asking me what they can do to present well to lenders for being qualified to buy a business
➡️ DMs coming in from Bankers & PE professionals looking to leave finance. 2/x
➡️ DMs coming in from Bankers & PE professionals looking to leave finance. 2/x
➡️ Moms reaching out that are looking to buy a business after being stay-at-home mothers for a period of time
➡️ Former SBA lending professionals reaching out about buying SMBs (some with very strong personal financial statements). 3/x
➡️ Former SBA lending professionals reaching out about buying SMBs (some with very strong personal financial statements). 3/x
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 casual observation from my trip in Costa Rica: there are entrepreneurs everywhere
➡️ At restaurants, waiters have side hustles doing sales to sign people up for local excursions
➡️ At the beach, it's an entrepreneur trying to sell you juice or a beer. 1/x
➡️ At restaurants, waiters have side hustles doing sales to sign people up for local excursions
➡️ At the beach, it's an entrepreneur trying to sell you juice or a beer. 1/x
➡️ This is not a political post but is simply my own opinion: America should take note of the hustle in countries like Costa Rica
➡️ If you lose your job, instead of seeking unemployment or sitting and playing Xbox, start shoveling snow or mowing lawns. 2/x
➡️ If you lose your job, instead of seeking unemployment or sitting and playing Xbox, start shoveling snow or mowing lawns. 2/x
➡️ There is a ton of opportunity out there, and there are many potential markets, services, and clients that need various things
➡️ Start hustling a bit more and complaining a bit less
➡️ If you aren't happy with your job, start a side hustle and turn it into your main hustle
➡️ Start hustling a bit more and complaining a bit less
➡️ If you aren't happy with your job, start a side hustle and turn it into your main hustle
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
There were a lot of folks in this picture that I didn't get to meet.
If you spot yourself here, comment with your background, what brought you onto SMB Twitter, and what you're looking to do in the space in 2023 👇
#sba #smb #acquisitions #entrepreneurs
If you spot yourself here, comment with your background, what brought you onto SMB Twitter, and what you're looking to do in the space in 2023 👇
#sba #smb #acquisitions #entrepreneurs
I'll go first:
➡️ Introduced to SMB Twitter in the spring of 2022 by @SAOliver_Atty (thanks, Scott!)
➡️ Joined the space to share information about acquisition financing within the SBA space
➡️ Looking to help 30 entrepreneurs close business acquisitions this year
➡️ Introduced to SMB Twitter in the spring of 2022 by @SAOliver_Atty (thanks, Scott!)
➡️ Joined the space to share information about acquisition financing within the SBA space
➡️ Looking to help 30 entrepreneurs close business acquisitions this year
I tag @SMB_Attorney - you're next!
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
One question has comes up when I speak with clients and prospects on a weekly basis is why some lenders offer fixed rate SBA loans, while others offer variable rate SBA loans. In this thread, I do a deep dive to explain the reasoning 🧵 👇
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
1 - How SBA Loans Work
➡️ SBA is a risk sharing program that involves 3 parties: 1) the Borrower, 2) the lender & 3) the bank
➡️ SBA is a risk sharing program that involves 3 parties: 1) the Borrower, 2) the lender & 3) the bank
2 - How SBA Loans Work (Cont.)
➡️ SBA insures (guarantees) a specific portion of the SBA loan amount. This is insurance for the bank to insure against the chance that the borrower defaults. For loans over $150,000, the SBA insures 75% of the loan amount.
➡️ SBA insures (guarantees) a specific portion of the SBA loan amount. This is insurance for the bank to insure against the chance that the borrower defaults. For loans over $150,000, the SBA insures 75% of the loan amount.
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.
A seller note on full standby "incentivizes the owner to help you for the life of the loan and helps create a higher cash on cash return for you as an entrepreneur" - Fady Ebeid, a searcher that worked with Pioneer Capital Advisory LLC
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
1/x: Why is a full standby seller note, and why do I need one for my SMB acquisition? In this 🧵 I will cover the answers to both of these questions.
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
2/x: Definition & Explanation:
➡️ A seller's note on full standby is defined as a note on which no payments of principal or interest are made for the term of the SBA loan
#sba #smb #acquisitions #entrepreneurs
➡️ A seller's note on full standby is defined as a note on which no payments of principal or interest are made for the term of the SBA loan
#sba #smb #acquisitions #entrepreneurs
Closing an SBA loan for an SMB acquisition does not need to be hard.
In fact, it should be easy, and the process should involve as little friction as possible. 1/x
#sba #smb #acquisitions #entrepreneurs
In fact, it should be easy, and the process should involve as little friction as possible. 1/x
#sba #smb #acquisitions #entrepreneurs
As a self-funded searcher, your time is incredibly valuable.
By the time that you have a deal under LOI, significant time and energy has gone into the search process including sourcing the opportunity, and negotiating the LOI with the seller. 2/x
By the time that you have a deal under LOI, significant time and energy has gone into the search process including sourcing the opportunity, and negotiating the LOI with the seller. 2/x
So where are these banks that are approving these SBA loans, and do all of them require 1.50x DSCR? 3/x
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
Tomorrow an SMB entrepreneur will close on a business acquisition with 80% bank financing for a ~$3.1 million enterprise value business.
In this thread, I will share some highlights of the story. 1/x
#sba #smb #acquisitions #entrepreneurs
In this thread, I will share some highlights of the story. 1/x
#sba #smb #acquisitions #entrepreneurs
On August 10th, @PIONEERCAPADV received a cold call from the searcher
"Hi this is [searcher's name]. I came across you on Searchfunder wanted to learn more about your process, etc"
Introductory discovery call takes place. Searcher gives high level overview of target co. 2/x
"Hi this is [searcher's name]. I came across you on Searchfunder wanted to learn more about your process, etc"
Introductory discovery call takes place. Searcher gives high level overview of target co. 2/x
On September 11th, the searcher executes an engagement letter with @PIONEERCAPADV for PCA to source the financing for the business acquisition. 3/x
This week @PIONEERCAPADV will help a self-funded searcher closer on an acquisition of $3.1 million EV business with a top 20 SBA lender. 1/x
#sba #smb #acquisitions #entreprenuers
#sba #smb #acquisitions #entreprenuers
Working with @PIONEERCAPADV, the searcher obtained multiple financing options from top SBA lender banks, and ultimately chose one that offered a combination of cash to the balance sheet at closing with an SBA Express Line of Credit. 2/x
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
In this thread, I'm going to cover how to get your deal closed by year end as an SMB searcher 🧵
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
1/x: Have an organized data room
➡️ Up-to-date financials for the target business being acquired
➡️ Corporate documentation for your business entity
➡️ Upd-to-date personal financial statement & last 3 yrs of personal tax returns for any 20% or more owner in the buyer group
➡️ Up-to-date financials for the target business being acquired
➡️ Corporate documentation for your business entity
➡️ Upd-to-date personal financial statement & last 3 yrs of personal tax returns for any 20% or more owner in the buyer group
2/x: Have a "Quarterback" for your ownership group
➡️ If you have multiple owners in your ownership group, there needs to be a "quarterback" point for communication with the bank
➡️ The quarterback responds to emails for the ownership group and helps streamline communications
➡️ If you have multiple owners in your ownership group, there needs to be a "quarterback" point for communication with the bank
➡️ The quarterback responds to emails for the ownership group and helps streamline communications
SMB searchers: the best time to engage me on a deal is before it's presented to one or more lenders.
Once your deal has been presented to a lender, it removes them as an option from my list. 1/x
#sba #smb #acquisitions #entrepreneurs
Once your deal has been presented to a lender, it removes them as an option from my list. 1/x
#sba #smb #acquisitions #entrepreneurs
Yesterday, I received an email from a prospective client. One that I would have loved to have helped. The client is looking for pari passu acquisition financing.
There are a handful of lenders that do this very well. He had contacted each of them. 2/x
There are a handful of lenders that do this very well. He had contacted each of them. 2/x
At this juncture, there is nothing I can do to help him. He has presented to each of them and pulling me in to help isn't an option.
SMB searchers: don't let this be you. Pull me in at the start of your deal when you have the signed LOI or shortly before. 3/x
SMB searchers: don't let this be you. Pull me in at the start of your deal when you have the signed LOI or shortly before. 3/x
One question that I frequently get asked by SMB searchers is what resources I recommend for finding a deal.
Below is where I would start. 1/x
#sba #smb #acquisitions #entrepreneurs
Below is where I would start. 1/x
#sba #smb #acquisitions #entrepreneurs
1/x: @withkumo_
This platform is a deal aggregator that pulls thousands of on market business broker listings consolidating them into an easy to navigate user dashboard where you can sort by price, industry, revenue, and other variables. 2/x
This platform is a deal aggregator that pulls thousands of on market business broker listings consolidating them into an easy to navigate user dashboard where you can sort by price, industry, revenue, and other variables. 2/x
2/x: @withkumo_ (cont.)
The platform is subscription based and costs $300/month, but with the code PIONEERCAP300, you can get a 2 week free trial + 1 month free 👇
withkumo.com/?via=matthias
The platform is subscription based and costs $300/month, but with the code PIONEERCAP300, you can get a 2 week free trial + 1 month free 👇
withkumo.com/?via=matthias
Buying a business is a very difficult undertaking.
There is a reason that few people do it that consider it.
One of the critical items when it comes to the financing process is having a well written business plan. In this thread, I will cover what one looks like.
There is a reason that few people do it that consider it.
One of the critical items when it comes to the financing process is having a well written business plan. In this thread, I will cover what one looks like.
1/x: As the buyer of a small to medium sized business (SMB), you are the new variable that is getting introduced to the equation when it comes a business acqusition.
2/x: From a lender's perspective, this creates a risk. The seller's business is currently running at status quo. As a buyer, one of 2 outcomes will happen: You improve things, or you end up running the business into the ground.
These are some great threads about how to buy a business with an SBA loan that I've seen on Twitter over the last several months.
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
1/x: Sieva Kozinsky's thread below 👇
2/x: Chris Munn's thread breaking down the steps:
One critical document that is required when you are buying a business that operates out of a leased location is a landlord waiver (also called a landlord agreement). In this thread, I'm going to cover what it is and why it's important.
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
When a business is financed with an SBA loan, SBA requires that a lender takes a General Business Security Agreement (a "GBSA") on the assets that are being financed with the acquisition. 1/x
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
The GBSA, which is perfected by the lender with a UCC filing, allows the lender to liquidate the collateral of the borrower in the event that there is a default on the SBA loan. 2/x
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
1/x: Buying a business can feel like a monumental undertaking as a searcher.
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
2/x: First, you have to identify a target company and work through the broker and seller to vet the due diligence materials to ensure it is worth pursuing.
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
In this thread, I am going to cover how it's possible to purchase a $5 Million business with $260,000 of cash down. I hope that you find this thread useful and educational.
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
1/x: SBA requires 10% equity for business acquisitions. This 10% is based on the total uses of funds for the acquisition. The total uses of funds includes the business purchase price, working capital, the SBA guaranty fee, and the closing costs.
#sba #smb #acquisitions
#sba #smb #acquisitions
2/x: 1/2 of the 10% can come from a seller note that is on full standby for the duration of the SBA loan. This means no payments can be made on this loan until it is paid off.
#sba #smb #acquisitions #entrepreneurs
#sba #smb #acquisitions #entrepreneurs
