I'm looking at an engagement with 3-owners who all handle sales and customer relationships. They are willing to stay on for >12 months as employees.
If that were the plan, would that render this deal SBA-ineligible?
Is there any way to work around this and maintain SBA eligibility with a different sort of employment structure?
Anyone with any experience or advice for retaining an owner(s) as managers/employees for an extended time?
My gut reaction isn't great here, but curious how others see it.
Owner/Seller remaining with the business beyond 12-months
by a searcher from Towson University
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I have had experience with two such deals (different structures -- one a consulting engagement, and the other a meaningful equity position) -- and in both of them we ending up terminating the relationship with the seller (terminating the consulting agreement in one, and taking out the seller's equity position in the other).
Some food for thought!
All the best!
Regards,
Madan.