SBA GUIDELINES ON OWNER INVOLVEMENT POST-ACQUISITION
I am looking at a transaction that we are considering an SBA loan for financing. 100% of the equity will transfer; however, the owner wants (and we would be interested in if possible), a 3 year transition period. My understanding is that post-transaction, no owner of the company may remain for longer than 1 year on a 1099 basis. Any thoughts on ways to accomplish a longer transition on an SBA deal or ways you have dealt with this before? TIA
Tagging a few Lenders that might be able to comment on this question: ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted], ^[redacted] (To our Lender friends, THANK YOU for helping to make Searchfunder a collaborative community! Be sure to take full advantage of your UNLIMITED access to BVR Deal Stats, now available under the VALUATIONS tab at the top of this screen. With Best Wishes, ^[redacted]).
but the old saying in the industry is “you never want to buy a business where the owner doesn’t want to stay 6 months and you never want to buy a business where the owner wants to stay longer than 6 months”. Meaning, transition as quick as you can and run the business.