Transferring a General Contractor License

by a searcher from Harvard University - Harvard Business School

1 year ago

I'm under LOI for a commercial landscaping business in Virginia that does some construction work. The owner is the only one who holds the Class A General Contractor license. The requirement to obtain the certification in Virginia is 5 years experience. The owner is willing to hold the license through the sale, but 5 years would be too long to wait before I could get it.  Has anyone dealt with something similar and figured out a creative solution besides hiring someone else with the cert?

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searcher from The University of North Carolina at Chapel Hill - Kenan-Flagler Business School

In addition to Brad's comments, you can reach out to GCs via the states database of GCs to find someone willing to tie their license to your business. We did this with trade licenses and had people on payroll that reviewed permits digitally and were only paid for their license. I believe it's fairly common for GCs as well especially in a company like yours that likely doesn't need the GC license that often.

1 year ago | like reply | 3 likes

lender from Eastern Illinois University

Some of it will depend on what type of financing you are seeking on the deal, but any lender is going to want to be sure you have the proper licensing. If you are doing SBA financing, you cannot utilize the seller because of the current restrictions in place (which might be changing this week). Most people will find a key employee that has the license and sign them to an employment agreement (but it sounds like that might not be an option in this case) and will bring in another team member that carries the license as part of the acquiring team. More than likely most lenders are going to want that person on the hook in some way via an employment agreement or even potentially a limited guarantee to ensure there is an incentive to keep that license in place. Just some initial thoughts. Happy to discuss at --@----.com

1 year ago | like reply | 1 like

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