How to do an asset sale while using current owners license

searcher profile

August 20, 2024

by a searcher from Miami University of Ohio in Cleveland, OH, USA

I am currently under LOI with an HVAC and Plumbing company in Ohio. The current plan is to use the current owner's license until I can get my own.

SBA banks are saying we need to Roll equity, (in the current LOI) but with rolling equity we can not do an asset deal.

Does anyone have experience using the seller's license and doing an asset deal using an SBA loan?

TIA

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commentor profile
Reply by an intermediary
in Campbell, CA, USA
In California, you can hire the seller as a Responsible Managing Owner (RMO) or Responsible Managing Employee (RME) or hire an RMO from the RMOAgency.com until you can get your own.
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Reply by a searcher
from University of North Carolina at Chapel Hill in Charlottesville, VA, USA
My situation was pretty similar: asset sale, SBA loan, garage door business in PA.

In our case the contractor's license wasn't a big deal and once we had insurance they issued us a new one. HVAC might be tougher license to get though.

Not sure where the equity rollover is coming from. Odd for a bank to require that. Can you hire the previous owner so you have access to his license until you get yours? And avoid the rollover requirement. Just reading David's comment above and thinking what would qualify as "actively engaged in the business".
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