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
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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.