Did you miss THIS???
The recent changes to the SBA may be the greatest single BOOST to the Searcher/ETA community!!!
But instead of "telling you" what's up....let me just show you what I mean.
From now on, here's what a typical deal structure might look like.
Example:
- 81% Buyout (Searcher buy's majority stake in the business)
- 19% Seller Equity Rollover (the Seller does not have to PG the SBA loan)
- *ZERO money down!* (buying less than 100% helps resolve the LTV problem for some banks)
- Buyer has the option to call (or buy out) the Seller's remaining equity after 12 months at the original valuation multiple
{cue 'Happy Dance'}
Here's why this changes EVERYTHING...
(1) The Buyer (Searcher) gets to take out a smaller loan, put ZERO money down, and STILL gets a majority (controlling) stake in the business. Booyah!
(2) The Seller gets 81% upfront and STILL gets to stick around the business for a while longer....without having to PG the SBA loan.
(3) If the Buyer manages to successfully supercharge the business, he/she can STILL buy out the Seller's remaining 19% equity stake at the exact same valuation multiple from before.
Bob Dylan said it best: "times, they are a changin."
I am thrilled to see what happens NEXT!
- Grant
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