Deal Structure to mitigate risk

Member resources:

Frequent asked questions:

What is Searchfunder.com?

Searchfunder.com is an online community of searchers, investors, lenders, brokers and other professionals. Over 80% of those involved in searchfunds maintain a Searchfunder account to help them network, hire, and mentor others.

What are the benefits of membership?

In addition to accessing the most active online network of business buyers, Searchfunder licenses research that is simply not cost effective for individuals. Access over 15,000 industry reports and 50,000 transaction financials. You also get monthly credits for contact information for your company sourcing campaign with the option to purchase more at drastically discounted rates. Searchfunder has pre-purchased access from these data providers in order to empower individual buyers and to help searchers level the playing field versus private equity.

Do you have deals?

While we are primarily a buy-side network, we do have hundreds of brokers that regularly post deals to the community.

Can I find an internship on Searchfunder?

Absolutely! We have the industry's largest intern job board. If you are considering a search, the first step is to help another business buyer so you can hit the ground running.

What does it cost?

Searchfunder is a subscription service. We offer flexible monthly, annual and lifetime memberships.

Monthly

$79 / month

Annual

$19 / month

Lifetime

$432 / once

Those who maintain an account with us for over 4 continuous years are permanently added to the community without the need for a membership.

Do I need an MBA to join?

While a large number of our members come from dedicated programs at Harvard Business School, Stanford GSB, Chicago Booth, and other top programs, searching is no longer reserved for the elite. With the current abundance of dry powder in private equity, and an increasing number of business owners reaching retirement age, good deals rarely go unfunded.

Post a question, deal, job, etc...

Make a post...

Complete registration to post.

by a searcher from University of Arkansas (System)
in Fayetteville, AR, USA

3yrs ago

Deal Structure to mitigate risk

I'm considering a business that is directly tied to construction of Multi-family and Hotels. The region I’m in has seen significant growth in multi-family construction in recent years. While demand is still strong, Interest rates have changed the economics for development. The seller of course believes that the business will continue to see significant demand increases.

What are some SBA compliant ways to structure a deal to mitigate risk of demand declines in coming years?

0 Likes

176 Views

reply by a searcher 3yrs ago
from Colorado State University in Centennial, CO, USA

I will mirror what Josh says about caution here. I am a commercial real estate veteran and CCIM who is sitting on the sidelines right now because I believe there is a much more severe storm on the horizon than most want to admit. These types of businesses are likely to be on sale in the next few years.

reply by a lender 3yrs ago
from Eastern Illinois University in 900 E Diehl Rd, Naperville, IL 60563, USA

Overall there is a lack of quality construction firms out there, so demand has remained strong for quality firms. However, I agree with the above posts that there are some serious headwinds in construction, especially due to the increases in interest rates. Most lenders are underwriting the end loans at much higher interest rates, which means many investors / developers need to bring substantially more equity into transactions to get the numbers to work, and this is leading to many projects stalling. Often times the capital stacks do not make sense for developers with too much equity.

With that said, there are always ways to structure deals if they make sense. Likely the biggest issue you will face today buying such a company from SBA lenders is experience. If you do not have direct industry experience, that will make it challenging to buy a construction company in any market but even more so today when the construction industry is expecting to face some headwinds. However, I would be more than happy to jump on a call and discuss this request or options with you in more detail if you would like. We are a Commercial Loan Brokerage shop with over 500 funding partners. You can reach me here or directly at redacted Good luck.