SBA and Long Term Owner Involvement
February 22, 2022
by a searcher in Austin, TX, USA
I'm looking at two different opportunities where I believe the founder's playing a very limited long term role could be beneficial to the companies post acquisition success. Both owners are essentially removed from all the day to day operations but I see a lot of value in them retaining a long term advisory position. They both agree and neither is even particularly interested in profiting from their continued involvement.
I have heard a lot of varying opinions from lenders on the exact limitations of how an owner can be involved beyond the 12 months the SBA allows. Can someone shed some light of how strict these rules are and how much is left open to the interpretation and risk tolerance of the individual lender?
from University of Massachusetts Amherst in New York, NY, USA
There are a number of deals I looked at where it would have been beneficial to keep the owner as an advisor past year 1.I think they would have also been agreeable to tying their involvement to a seller note--included in the price of the business.
If there is anyway around this, I would also like to hear about it..
from George Mason University in Jacksonville, FL, USA