As an independent sponsor, one of the biggest challenges is developing deal flow. The second is access to capital.
Last year, I looked at several businesses including a multisite urgent care operator, a non-emergency medical transportation business, and a portfolio of Church’s Chicken restaurants, that did not include the real estate, among others.
I was fortunate to find a home healthcare and skilled nursing business for sale on The business was started in 1997 and weathered the storms of the dotcom crash, the great recession, and the Covid-19 pandemic. The revenue and cash flow has been consistent for the past several years and it was bankable.
I submitted the Letter of Intent and it was accepted in November###-###-#### I received a loan proposal from a major SBA lender in February 2023 for $2.2 million. My team and I went to work on the financial and legal due diligence.
We were able to get the full application, Quality of Earnings, and other supporting documentation over to the lender in a timely manner. The lender issued a commitment letter for a little over $2.1 million in May###-###-#### We raised the equity injection and were ready to close.
Unfortunately, there was an issue that came up during my background check and the lender withdrew from the deal. I was convicted of a misdemeanor in 1997, when I was in high school, for carrying a pocket knife on school property. I’ve never had a problem with this before but it was my fault for not disclosing it.
I worked tirelessly to find another lender. After shopping the deal to 11 different banks, I found a SBA lender, Lendistry, who was interested in the deal.
They liked healthcare. They liked the Atlanta market. They liked the deal. And they liked me. I was grateful and motivated to see this deal close.
They issued a conditional commitment letter on October 6th, 2023. Again, my team and I worked tirelessly to meet the closing conditions before the lender’s deadline. Here is where we ran into a brick wall.
In Georgia, the change of ownership process is a bit arduous. They require an executed purchase agreement to begin the process. The purchase agreement was a work in progress and we were trying to get the seller and his team comfortable with the change of ownership process.
We went through several revisions to get the final terms nailed down. Unfortunately, the seller’s team started to make unreasonable demands. They expected the lender to fund the deal prior to the change of ownership taking place. This was impossible. There isn’t a lender in existence who would agree to this.

After a lot of back and forth, I brought on an Atlanta based, healthcare M&A attorney to get the seller, and his team, comfortable with the process. My legal team, my new attorney, and the lender all tried to set expectations with the seller’s attorney to drive this deal to the closing table to no avail. The seller backed out.
Whatever the reason is, I don't think that the seller’s team was acting in his best interest. The deal was larger and more complicated than his attorney and broker were used to working on. They tried to play hardball when it wasn’t warranted.
We were willing and able to put $1.8 million dollars in the seller's pocket at closing and another $400,000 note that would’ve been paid out when I refinanced. To say that I was disappointed is an understatement.
An entire year's worth of work went up in smoke. Fortunately, I was introduced to a broker who has a larger home healthcare deal for sale.
I submitted a Letter of Intent a few weeks ago. We are making significant progress on getting this deal financed and closed by the end of the first quarter.
I am grateful for the opportunity to compete on that deal last year, go through the SBA loan application process with multiple lenders, build fantastic relationships with my current and prospective limited partners, work with amazing financial and legal advisors on the deal, and grow into my role as an independent sponsor.
This experience has reshaped my thinking on how I approach and analyze deals, engage sellers and their team, and structure deals in a way that creates a win-win for all parties involved.
I’m looking forward to this new year and the opportunities, to do well by doing good, in the healthcare industry.